Exam 7: Capital Gains and Other Sales of Property

Geraldine inherited a piece of land when her father Albert died on July 26, 2014. The FMV of the land at the date of death was $40,000 and cost Albert $20,000 in 2008. Geraldine sold the land on March 29, 2015 for $45,000. What are the amount and nature of the gain on the sale?

If the property's fair market value at the date of the gift is lower than the adjusted basis, then the property's basis for determining loss is its fair market value on that date.

The forms used to report a gain or loss on the sale of an asset depend on the classification of the asset being sold rather than on how the asset was used prior to sale.

Property owned by a taxpayer and used either for personal purposes, investment, or in a trade or business is a capital asset.

The holding period for property acquired by inheritance begins on the date of the decedent's death.

Patrice sells a parcel of land for $50,000 cash and the buyer assumes Patrice's liability of $7,000 on the land. Patrice's basis in the land is $40,000. What is the gain or loss she will recognize on the sale?

Anike received property as part of an inheritance from her father who passed away on March 10, 2015. Her father purchased the property on July 3, 2014, for $146,000. Anike sold the property on June 30, 2015, for $158,000. At the date of his death the property had a FMV of $144,000. What gain, if any, will Anike pick up on her return for 2015?

Francisco sells a parcel of land for $90,000 cash and the buyer also assumes Francisco's liability of $10,000. The basis of his land is $60,000. What is the gain or loss realized on the sale?

Sara owns an automobile for personal use. The adjusted basis is $13,500 and the FMV is $10,500. Sara has owned the car for two years. a. Calculate the realized gain (loss) if Sara sells the vehicle for $12,500. b. Calculate the recognized gain (loss) if Sara sells the vehicle for $12,500. c. Calculate the realized gain (loss) if Sara sells the vehicle for $15,000. d. Calculate the recognized gain (loss) if Sara sells the vehicle for $15,000.

Which of the following statements is incorrect regarding the gain or loss from the sale of property received as a gift?

Tamiko buys a painting from a collector for resale in her gallery for $3,500. She sold it 15 months later for $5,500. What are the nature and amount of the gain on the sale of the painting?

In 2015, Daryl sold 425 shares of Basketball Heaven Mutual Fund for $18,000. He made the following purchases of Basketball Heaven stock: Assuming Daryl uses the single category average cost method, he will realize:

In 2015, Marty has a net short-term capital loss of $2,400, a net long-term capital loss of $12,000, and wage income of $59,850. a. What is Marty's capital loss deduction for 2015? b. What amount of the capital loss qualifies as a carryover? c. What is Marty's total income for 2015 before additions/deductions for adjusted gross income?

The gain or loss on the sale of property held as an investment is recorded on which one of the following forms or schedules?

Real property held for investment is a capital asset.

If a taxpayer has a net Section 1231 loss for the year, all Section 1231 gains and losses are treated as being capital gains and losses.

Before the tax implications of asset sales can be determined, which of the following must be determined?

Hiroko, a single taxpayer, has wage income of $80,000. In addition, she has $5,000 in long-term capital losses, $4,000 in long-term capital gains, and $4,000 in short-term capital gains. What is Hiroko's AGI for 2015?

Currently, the maximum capital gain rate applied to a taxpayer in the 15% regular tax bracket is 0%.

Marquez purchased some equipment for $58,750 on August 15, 2014. He decided he did not need the equipment so he sold it on June 13, 2015 for $56,500. The equipment was subject to depreciation of $6,964 for 2014 and 2015. What gain or loss will Marquez recognize on the sale of the equipment?