Exam 8: Property Dispositions

Identify the type(s) of gain or loss that would be recognized on the following asset sales as capital, Section 1231, ordinary, Section 1245 recapture, Section 291 recapture, or Section 1250 unrecaptured gain. -Gain on the sale of a personal residence.

Identify the type(s) of gain or loss that would be recognized on the following asset sales as capital, Section 1231, ordinary, Section 1245 recapture, Section 291 recapture, or Section 1250 unrecaptured gain. -Loss on the factoring of receivables.

When does an asset have a substituted basis?

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?

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

Which of the following is correct?

Carlos provides you with the following information for years 1 and 2, exclusive of capital loss carryovers: STCG STCL LTCG LTCL Year 1 0 $2,400 $400 $3,500 Year 2 $500 $ 700 $900 $1,000 Determine the amount and type of capital loss deduction each year, if any, and the carryover to the following year.

To determine the tax, a taxpayer with a $5,000 gain on the sale of a collectible and a $10,000 gain on the sale of stock, adds the gain on the stock to income after the gain on the collectible.

Identify the type(s) of gain or loss that would be recognized on the following asset sales as capital, Section 1231, ordinary, Section 1245 recapture, Section 291 recapture, or Section 1250 unrecaptured gain. -Gain on sale of a building used by a sole proprietorship for eight years in excess of its original cost.

Taxpayer B has the following gains and losses from property transactions. What is the effect on the taxpayer's taxable income if Taxpayer B is (a) a corporation; (b) an individual? Long-term capital gain $4,000 Long-term capital loss 7,000 Section 1231 gain 10,000 Section 1231 loss 6,000 Short-term capital gain 3,000 Short-term capital loss 6,000

Caldwell Corporation sold a factory building for $300,000 that it originally purchased for $600,000. It had an adjusted basis of $200,000 due to having taken $400,000 of depreciation. What is Caldwell's Section 1231 gain on the sale of the property?

Vanessa bought 2,000 shares of Glenco stock when the company was first formed for $57,000. The company had $900,000 of total capital when formed and the stock qualified as Section 1244 stock. Vanessa sold the stock three years later for $3,000. If Vanessa is single, how much gain or loss does she have on the sale of the stock and how will it be treated by her?

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 2018. What is the tax rate applied to this gain?

Identify the type(s) of gain or loss that would be recognized on the following asset sales as capital, Section 1231, ordinary, Section 1245 recapture, Section 291 recapture, or Section 1250 unrecaptured gain. -Emma sold her home for $60,000 cash and the buyer's assumption of her mortgage of $210,000. Emma paid closing costs of $2,900 and a broker's commission of $13,000. What is the amount Emma realized on the sale?

William purchased his personal residence in 2011 for $285,000. In early 2017, he lost his job and was unable to make payments on the mortgage. In December 2017, 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?

Which of the following comparisons is correct?

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

What is Section 291 recapture?

Jason sells a piece of equipment for $43,000. The equipment was purchased four years ago for $56,000. It was depreciated using an accelerated method of depreciation. Its adjusted basis at the time of sale is $21,000. Straight-line depreciation would have been only $20,000. What is the amount and type of gain Jordan recognizes on this sale?

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?