Exam 11: Property Dispositions

Olive Company sells factory equipment with an adjusted basis of $30,000 for $33,000. Allowable depreciation of $8,000 had been deducted as of the sale date. What is the amount and character of the gain or (loss) on the sale of the equipment?

Terry receives investment property from her mother as a gift in 2018. Her mother paid $15,000 for the property in 2012, and it is valued at $18,000 on the date of the gift. Terry sells the property eight months later for $16,000. Terry's gain or loss is

Harry sells an apartment building for $117,000. The building was held as an investment, it cost $95,000 and had an basis of $83,000 at the date of the sale. If Harry is in the 32% marginal tax rate bracket without considering the effect of the sale, how much tax is paid on the gain on the sale of the apartment building?

Tracey sells General Electric stock (owned 10 years) for a $40,000 gain in the current year. In addition, she has a loss of $20,000 on the sale of one acre of land used in her trade or business. The land was purchased five years ago. Tracey's net capital gain (loss) for the current year is:

If an individual sells depreciable real estate at a gain I.the entire gain is taxed at a maximum rate of 15%. II.the gain due to depreciation is taxed as a long-term capital gain. ​

All of the following are capital assets with the exception of

Courtney and Nikki each own investment realty that they would like to trade. Courtney's property is subject to mortgage debt of $10,000, and its appraised fair market value is $25,000. Nikki's property is subject to mortgage debt of $17,000, and its appraised fair market value is $25,000. Courtney and Nikki agree to exchange the properties and assume each other's debt. To complete the exchange, who pays cash and how much will that person have to pay?

Brenda sells stock she purchased in 2005 for a $7,500 gain in 2018. In August 2018, she also sells land she purchased as an investment in December 2017 at a loss of $9,000. I.For 2018, Brenda's tax on the $7,500 gain is $1,125. II.Brenda can deduct $3,000 of the $9,000 loss in 2018. III.For 2018, Brenda has a net long-term capital loss of $9,000. IV.Brenda can only deduct a capital loss of $1,500 in 2018. ​

Assets eligible for preferential treatment under Section 1231 include I.Certain assets held for less than a year. II.Real estate used in a business held for more than a year. III.Horses held for more than two years. IV.Lumber held by a lumber store. ​

"Recapture of depreciation" refers to:

Explain why a taxpayer would ever consider using accelerated depreciation methods on personal property, given the provisions of Section 1245.

A capital asset includes which of the following? I.real estate held as an investment in rental property. II.the copyright to a song held by its writer. III.real estate used in a trade or business. IV.accounts receivable. ​

Tory sells General Electric stock (owned 10 years) for a $40,000 gain in the current year. In addition, she had a loss of $20,000 on the sale of one acre of land used in her trade or business. The land was purchased five years ago. Tory's net Section 1231 gain (loss) for the current year is:

Match each statement with the correct term below. -Capital Asset

In July 2018, Harriet sells a stamp from her stamp collection at a gain of $500. Harriet purchased the stamp in 2010. If Harriet is in the 35% marginal tax rate bracket and has no other capital asset sales in 2018, what is her tax on the sale of the stamp?

Philip purchased an apartment building in 2001 for $1,000,000. During 2018, the building is sold for $800,000. The accumulated depreciation on the building as of the sale date was $300,000. What is the amount and character of the gain recognized on the sale?

Benjamin has a $15,000 Section 1231 gain from the sale of business-use real estate and a $3,500 long-term capital gain from the sale of Rhyne Corporation stock. Also, he suffers an $18,000 (net of insurance reimbursements and the $100 floor) personal-use property casualty loss. No net Section 1231 losses have been deducted as ordinary losses in prior years. Benjamin's current-year adjusted gross income will increase (decrease) by what amount?

Joyce receives investment property from her mother as a gift in 2018. Her mother paid $15,000 for the property in 2012, and it is valued at $18,000 on the date of the gift. Joyce sells the property eight months later for $16,000. Joyce's realized gain or loss is

When a taxpayer sells only a portion of the securities that they own, the average cost method is used to establish the cost basis for the shares sold.

Morgan has the following capital gains and losses for the current tax year ? Short-term capital gains \ 12,000 Long-term capital gains 3,000 Short-term capital losses (7,000) Long-term capital losses (6,000) What is Morgan's net capital gain or loss position for the year?