Exam 7: Property Dispositions

The holding period for an asset acquired by inheritance is determined by including the period the asset was held by the decedent.

What are the basic differences between Section 1245 and Section 1250 depreciation recapture?

George and Sally sold their primary residence in New Jersey on January 1,2013 after having lived in the home for 20 years.(They used their $500,000 exclusion to avoid recognizing their $289,000 gain on the sale.)They decided to become permanent Florida residents and moved into the condominium they had purchased on January 2,2011 at a foreclosure auction.Unfortunately,Sally missed all of her friends and family in New Jersey and in the latter part of 2015,they put the condominium up for sale and they sold it on January 2,2016.They had purchased the condominium for only $65,000 and after putting in improvements at a cost of $21,000,they were able to sell it for $525,000.What is their realized and recognized gain on the sale of the condominium?

The Section 1231 look-back rules change the character of capital losses incurred in the previous 5 years.

Coley Corporation has an $800 net short-term capital loss and a $6,000 net long-term capital gain in the current year.It also has an $8,000 long-term capital loss carryover from the prior year.What is Coley's capital loss carryover to the next year?

What are the carryover provisions for unused capital losses applicable to individuals?

How are individual and corporate net capital losses treated?

A mixed-use asset is an asset that is used for both personal purposes and business activities.

Section 1245 recapture is primarily applicable to realty.

An individual taxpayer has the following property transactions during the current year: Personal automobile owned 3 years $4,000 loss on sale Business equipment owned 3 years $5,600 gain on sale Factoring of receivables $6,200 loss Common stock owned 7 months $3,500 gain on sale How do these transactions affect the individual's AGI?

William purchased his personal residence in 2008 for $285,000.In 2014,he lost his job and was unable to make payments on the mortgage after June,2014.In 2015,William worked out a new repayment schedule with his bank after he obtained a new job that reduced his mortgage from $235,000 to $120,000.Which of the following statements is true regarding this mortgage reduction?

Edna had $20,000 of ordinary income.In addition,she had a $1,500 short-term capital gain on one stock and a $4,900 long-term capital loss on another.What is her adjusted gross income?

In 2015,capital gains of individuals can be taxed at 0%,10%,15%,20%,25%,or 28%,excluding surtaxes.

Tina is single and one of the founding shareholders of Exacta Corporation.She acquired her Exacta Section 1244 stock four years ago for $123,000.During the current year,Tina sold all of her Exacta stock to an unrelated party for $40,000.Tina had no other capital gains or losses during the year.What is the maximum amount of loss Tina can deduct in the current year for the Exacta stock?

Wally (who is in the 25 percent tax bracket)has a $5,000 short-term capital loss on some bonds,a $6,000 long-term capital loss on collectibles,a $15,000 Section 1202 gain,and a net $4,000 long-term capital gain from an investment.What is amount and type of gain(s)and tax rate(s)applied?

Which of the following comparisons is correct?

The holding period for a long-term capital asset is only one year for tax-favored treatment.

Gain representing depreciation recapture on equipment is taxed at ordinary income rates.

What did Congress do to close the loophole that allowed a person to exclude the gain on a primary personal residence and then later claim the exclusion on a vacation home that was owned at the same time as the primary residence?

Becky bought a home with her husband,Ken,in 2001 for $125,000.They were divorced in 2010 and Becky became sole owner of the home under the divorce decree.On January 5,2014,Becky married Michael.Michael and Becky have been living in the house since their marriage but they are planning now to move.If Michael and Becky sell their home on December 15,2015 for $500,000,how much taxable gain must they report on their 2015 joint tax return?