Exam 8: Capital Gains and Losses

During the current year, Ethel exchanges a machine for another machine in a like-kind exchange. Ethel's adjusted basis in the machine given up is $7,000, and she receives a machine worth $13,000 plus $3,000 cash. a.Calculate the amount of gain realized by Ethel on the exchange. b.Calculate the amount of the gain that must be recognized by Ethel on the transaction. c.Calculate Ethel's basis in the new machine.

(Essay)

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Question 41

At the end of the current year, Falstaff sold for $4,800 General Martin stock that was purchased 5 months ago for $4,000. He also sold Cedar stock for $6,000 at the same time. The Cedar stock cost $4,000, 2 years ago. In addition, Falstaff has a short-term capital loss of $500 on the sale of silver. a.Calculate the amount of Falstaff's net short-term and net long-term capital gain or loss. b.If Falstaff has a net capital gain, what is the maximum rate at which the gain will be taxed?

(Essay)

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Question 42

Ben purchased an apartment building about 10 years ago, for $200,000. The building has been depreciated over the appropriate recovery period using the straight-line method. In the current year, the building was sold for $220,000, when the accumulated depreciation was $62,500. Ben is in the highest tax bracket; on his current year tax return, he should report:

(Multiple Choice)

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Question 43

In the current year, Tim sells Section 1245 property for $28,000 that he had purchased 6 years ago. Tim has claimed $7,000 in depreciation on the property and originally purchased it for $20,000. How much of the gain is taxable as ordinary income?

(Multiple Choice)

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Question 44

In 2016, Paul, a single taxpayer, has taxable income of $30,000 exclusive of capital gains and losses. Paul incurred a $1,000 short-term capital loss and a $4,000 long-term capital loss. What is the amount of his long-term capital loss carryover to 2017?

(Multiple Choice)

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Question 45

In the current year, Keyaki Construction Company exchanged an old truck, which cost $53,000 and had accumulated depreciation of $16,000, for a new truck having a fair market value of $65,000. In connection with the exchange, Keyaki paid $28,000 in cash. What is the tax basis of the new truck?

(Multiple Choice)

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Question 46

Assuming a taxpayer has no other gains or losses for the year, a loss from the theft of a Section 1231 asset is treated as a capital loss.

(True/False)

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Question 47

Robert acquired his rental property 10 years ago for $110,000 and sold it in the current year for $230,000. The accumulated straight-line depreciation on the property at the time of the sale was $35,000. Robert is in the 35 percent tax bracket for ordinary income. a.What is Robert's gain on the sale of his rental property? b.How is the gain taxed? (i.e., What tax bracket is the gain subject to)?

(Essay)

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Question 48

Sol purchased land as an investment on February 12, 2015 for $85,000. On January 31, 2016, Sol sold the land for $90,000 cash. What is the nature of the gain or loss?

(Multiple Choice)

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Question 49

Rod had the following loss on business-use property: Calculate the amount and nature of Rod's gain or loss as a result of this casualty.

(Essay)

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Question 50

A taxpayer eligible to use the installment method for reporting gain on the sale of an asset must use the installment method unless he or she elects out of the provision.

(True/False)

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Question 51

For purposes of taxation of capital gains:

(Multiple Choice)

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Question 52

The exchange of inventory does not qualify for like-kind exchange treatment.

(True/False)

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Question 53

In the current year, Helen sold Section 1245 property for $6,000. The property cost $26,000 when it was purchased 5 years ago. The depreciation claimed on the property was $24,000. a.Calculate the adjusted basis of the property. b.Calculate the amount of ordinary income under Section 1245. c.Calculate the Section 1231 gain.

(Essay)

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Question 54

An asset's adjusted basis is computed as:

(Multiple Choice)

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Question 55

Bennett purchased a tract of land for $20,000 in 2010 when he heard that a new highway was going to be constructed through the property and the land would soon be worth $200,000. The highway project was abandoned in 2016 and the value of the land fell to $15,000. Bennett can claim a loss in 2016 of:

(Multiple Choice)

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Question 56

Simon sold investment property 2 years ago for $750. Simon's basis in the property was $200. Simon is receiving $150 per year from the buyer. Simon reports this income on the installment method. If Simon collects $150 in principal during the current year, how much gain should he report from the sale for the year?

(Multiple Choice)

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Question 57

Which one of the following is a capital asset?

(Multiple Choice)

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Question 58

If not entirely used in one sale, the unused portion of the $250,000 exclusion on the sale of a taxpayer's principal residence may be used to reduce the recognized gain on the sale of the taxpayer's next residence.

(True/False)

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Question 59

The first day a capital asset acquired on August 31, 2015 may be sold for long-term capital gain or loss treatment is September 1, 2016.

(True/False)

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Question 60

Showing 41 - 60 of 109

In the current year, Tim sells Section 1245 property for $28,000 that he had purchased 6 years ago. Tim has claimed $7,000 in depreciation on the property and originally purchased it for $20,000. How much of the gain is taxable as ordinary income?

In 2016, Paul, a single taxpayer, has taxable income of $30,000 exclusive of capital gains and losses. Paul incurred a $1,000 short-term capital loss and a $4,000 long-term capital loss. What is the amount of his long-term capital loss carryover to 2017?

In the current year, Keyaki Construction Company exchanged an old truck, which cost $53,000 and had accumulated depreciation of $16,000, for a new truck having a fair market value of $65,000. In connection with the exchange, Keyaki paid $28,000 in cash. What is the tax basis of the new truck?

Assuming a taxpayer has no other gains or losses for the year, a loss from the theft of a Section 1231 asset is treated as a capital loss.

Sol purchased land as an investment on February 12, 2015 for $85,000. On January 31, 2016, Sol sold the land for $90,000 cash. What is the nature of the gain or loss?

Rod had the following loss on business-use property: Calculate the amount and nature of Rod's gain or loss as a result of this casualty.

A taxpayer eligible to use the installment method for reporting gain on the sale of an asset must use the installment method unless he or she elects out of the provision.

For purposes of taxation of capital gains:

The exchange of inventory does not qualify for like-kind exchange treatment.

An asset's adjusted basis is computed as:

Bennett purchased a tract of land for $20,000 in 2010 when he heard that a new highway was going to be constructed through the property and the land would soon be worth $200,000. The highway project was abandoned in 2016 and the value of the land fell to $15,000. Bennett can claim a loss in 2016 of:

Which one of the following is a capital asset?

If not entirely used in one sale, the unused portion of the $250,000 exclusion on the sale of a taxpayer's principal residence may be used to reduce the recognized gain on the sale of the taxpayer's next residence.

The first day a capital asset acquired on August 31, 2015 may be sold for long-term capital gain or loss treatment is September 1, 2016.

The Individual Income Tax Return

Gross Income and Exclusions

Business Income and Expenses Part I

Business Income and Expenses Part II

Itemized Deductions and Other Incentives

Credits and Special Taxes

Accounting Periods and Methods and Depreciation

Withholding Estimated Payments and Payroll Taxes

Partnership Taxation

The Corporate Income Tax

Tax Administration and Tax Planning

Filters

Exam 8: Capital Gains and Losses

In the current year, Tim sells Section 1245 property for $28,000 that he had purchased 6 years ago. Tim has claimed $7,000 in depreciation on the property and originally purchased it for $20,000. How much of the gain is taxable as ordinary income?

In 2016, Paul, a single taxpayer, has taxable income of $30,000 exclusive of capital gains and losses. Paul incurred a $1,000 short-term capital loss and a $4,000 long-term capital loss. What is the amount of his long-term capital loss carryover to 2017?

In the current year, Keyaki Construction Company exchanged an old truck, which cost $53,000 and had accumulated depreciation of $16,000, for a new truck having a fair market value of $65,000. In connection with the exchange, Keyaki paid $28,000 in cash. What is the tax basis of the new truck?

Assuming a taxpayer has no other gains or losses for the year, a loss from the theft of a Section 1231 asset is treated as a capital loss.

Sol purchased land as an investment on February 12, 2015 for $85,000. On January 31, 2016, Sol sold the land for $90,000 cash. What is the nature of the gain or loss?​

Rod had the following loss on business-use property: ​ ​ ​ ​ Calculate the amount and nature of Rod's gain or loss as a result of this casualty. ​

A taxpayer eligible to use the installment method for reporting gain on the sale of an asset must use the installment method unless he or she elects out of the provision.

For purposes of taxation of capital gains:

The exchange of inventory does not qualify for like-kind exchange treatment.

An asset's adjusted basis is computed as:

Which one of the following is a capital asset?

If not entirely used in one sale, the unused portion of the $250,000 exclusion on the sale of a taxpayer's principal residence may be used to reduce the recognized gain on the sale of the taxpayer's next residence.

The first day a capital asset acquired on August 31, 2015 may be sold for long-term capital gain or loss treatment is September 1, 2016.

The Individual Income Tax Return

Gross Income and Exclusions

Business Income and Expenses Part I

Business Income and Expenses Part II

Itemized Deductions and Other Incentives

Credits and Special Taxes

Accounting Periods and Methods and Depreciation

Withholding Estimated Payments and Payroll Taxes

Partnership Taxation

The Corporate Income Tax

Tax Administration and Tax Planning

Filters

Sol purchased land as an investment on February 12, 2015 for $85,000. On January 31, 2016, Sol sold the land for $90,000 cash. What is the nature of the gain or loss?

Rod had the following loss on business-use property: Calculate the amount and nature of Rod's gain or loss as a result of this casualty.