Exam 7: Capital Gains and Other Sales of Property

In 2006, Savannah purchased 200 shares of Hi-Style stock as an investment. The stock cost $12,000. In 2015 when the fair market value was $14,000, Savannah gave the stock to her daughter, Daniele. If no gift tax is paid and Daniele sells the stock for $15,000, she will recognize:

Section 1231 property is:

Reuben, a single taxpayer, has wage income of $75,000. He also has a short-term capital loss of $5,000, a short-term capital gain of $2,000, and a long-term capital gain of $3,000. What is Reuben's AGI for 2015?

In 2012, Joe purchased land for $73,500 for use in his business. He sold it in 2015 for $100,000. What is the gain on the sale before any netting?

If the taxpayer's aggregate Section 1231 gains for the year exceed aggregate Section 1231 losses for the year, all such gains and losses are considered to be ordinary.

On May 1, 2014, Kelalani purchased land for $98,000 for use in her business. She sold it on May 1, 2015, for $92,000. If there are no other sales of business or trade property, how is this loss treated for tax purposes on Kelalani's return?

The top tax rates for an individual with long-term capital gains on the sale of stock and on the sales of collectibles, sold after December 31, 2012 are:

Gilberto invested in a mid-size local company with gross assets of $16,000,000. Gilberto purchased 1,000 shares for $48,000 in 1999. In 2015, Gilberto sold the stock for $78,000. How is the gain treated for tax purposes?

Which of the following statements is correct regarding the sale of ordinary assets?

Genevieve sold 300 shares of stock on June 13, 2015 for $52,400. She purchased the shares on the following dates: Assume these shares of stock sold were her only net investment income for 2015. a. Determine the amount and character of the recognized gains or losses on the sale of the stock. b. If Genevieve is in the 33% tax bracket, what is the amount of tax assessed on the sale of the stock considered long term? c. If Genevieve is in the 15% tax bracket, what is the amount of tax assessed on the sale of the stock considered long term? d. If Genevieve is in the 39.6% tax bracket, what is the amount of tax assessed on the sale of the stock considered long term?

Amal gave his sister, Dora 100 shares of stock on April 3, 2014. Amal originally paid $3,100 for the stock on January 5, 2014. At the date of the gift, the fair market value of the stock was $2,800. If no gift tax is paid and Dora sells the stock for $2,700 on August 31, 2015, she will recognize:

When a Section 1231 asset is sold, the gain can be either classified as an ordinary or capital gain.

All of the following statements regarding Section 1231 are incorrect except:

The taxpayer always reports a worthless security as a long-term capital loss in the year the security becomes worthless.

In 2009, Naila purchased land for $77,000 for use in her landscape business. She sold it in 2015 for $83,000. If Naila has no other sales of business or trade property, how will this gain be taxed?

Keiko sells a piece of equipment used in her business for $14,853 on August 10, 2015. The equipment was purchased on January 4, 2014 at a cost of $12,849. Keiko has taken $3,855 of depreciation on the equipment. What is the amount and classification of the gain on the sale by Keiko?

Padraic purchased 50 shares of stock as an investment for the purchase price of $1,500 in 2012. In 2015 when the fair market value of the stock was $2,000, Padraic gave the stock to his sister, Fiona. If no gift tax is paid and Fiona sells the stock for $1,750 she will recognize:

Which one of the following is a capital asset?

Anupay sold 900 shares of Stay-Rich Mutual fund for $85,600 in 2015. She purchased shares in the mutual fund in the following years. (all 2014 shares are considered to be held for > 1 year) a. Determine the amount of the gain or loss assuming Anupay uses the single category average cost method. b. Assuming there are no other Schedule D transactions, how much of a gain or loss will Anupay recognize on her Form 1040 for 2015? c. How much, if any of the gain or loss will be carried over to 2016?

A taxpayer who receives only one form 1099-B from the sales of stock can enter the transaction directly to Schedule D.