Exam 7: Property Dispositions

During the current tax year,the Jeckel Company has the following gains and losses from property transactions: $12,000 Section 1231 gain $23,000 long-term capital gain $21,000 Section 1231 loss $4,000 Section 1231 gain What is the amount and type of gain or loss reported by Jeckel for the year?

In what order are capital gains subject to the 15%/20%,25%,and 28% capital gains included in taxable income in the determination of the tax liability?

What are the basic long-term capital gain tax rates and to which asset gains do they apply?

On January 4,2015,Courtney gave his son,Brian,stock valued at $10,000 that he had purchased three years earlier for $16,000.Later in the year,Brian sold the stock for $11,000.What is the amount and type of gain or loss that Brian will report on this sale?

What is the difference between a realized gain or loss and a recognized gain or loss?

Which of the following is correct?

Sheldon had salary income of $40,000.In addition,he had the following gains and losses on his property transactions: Long-term capital gain = $14,000; long-term capital loss = $6,000; short-term capital gain = $4,000; short-term capital loss = $8,000.If Sheldon has no other income items,what is his total income before any deductions for the year?

A taxpayer who disposes of his or her home in a short sale must recognize up to $1 million in cancellation of indebtedness income.

What is the effect of the Section 1231 look-back rules?

Martone Corporation sells two machines and a warehouse it has been using for storage in the current tax year.Each of the machines cost $25,000 and has an adjusted basis of $11,000 when each was sold for $14,000.The warehouse cost $105,000,has an adjusted basis of $60,000 and is sold for $95,000.All assets were depreciated using MACRS depreciation.What is the amount and type of gain recognized by Martone on the sale of these assets?

Shawn,a single taxpayer,sold the house he lived in for seven years for $700,000.He purchased the house for $285,000.He made improvements at a cost of $125,000 and paid a $30,000 commission on the sale.What are Shawn's realized and recognized gains on the sale?

Marvin sold his sister,Sue,some stock for $20,000 purchased two years ago for $25,000.Nine months later,Sue sold the stock for $27,000.How much gain does Sue recognize on the sale?

Which of the following statements concerning the exclusion available under Section 121 for the sale of a personal residence is correct?

Section 291 recapture only applies to a corporation.

Which of the following is not a requirement for the stock of a corporation to be considered Section 1244 stock?

Kelly,a single individual,has $15,000 of taxable income before a long-term capital gain of $5,000 on the sale of some stock owned for two years that she sold in 2015.What is the tax rate applied to this gain?

Margo purchased 2,000 share of qualifying Section 1202 stock six years ago for $200,000.In the current year,she sold the stock for $2,000,000.How much gain can she exclude from her income?

The most common ordinary income assets are receivables and inventory.

Which of the following is a capital asset?

The tax effect of a sale of an asset at a gain increases the cash flow from the sale.