Exam 8: Property Dispositions

Which of the following is a capital asset?

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. -Noah sold investment land for $70,000 cash and the buyer's assumption of Noah's $30,000 mortgage on the property. Noah paid a realtor's commission of $2,800 on the sale. What is Noah's realized gain if the land has an adjusted basis of $57,000?

In 2018, capital gains of individuals can be taxed at 0%, 10%, 15%, 20%, 25%, or 28%, excluding surtaxes.

Lopez Corporation sold equipment that it had purchased for $300,000 ($100,000 cash and a note for $200,000) four years ago. As of the date of sale, Lopez had claimed $187,500 in accumulated depreciation on this equipment and had made $50,000 in principal payments on the note. Lopez received $80,000 cash and a note for $100,000 in addition to the purchaser assuming Lopez's $150,000 note on the equipment. What percentage of Lopez Corporation's realized gain on the sale will be taxed as ordinary income due to depreciation recapture?

Vero Corporation owns $200,000 of equipment used for its business and the building that the business is located in that is valued at $175,000. The business is successful and has investments in marketable securities valued at $45,000. What is the value of its capital assets?

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 sale of municipal bonds by a corporation.

What are three types of dispositions other than a sale? Briefly explain each.

A personal residence owned by an individual is a capital asset.

In 2018, Isabella sold several shares of different stocks held for investment. The following is a summary of her capital transactions for the year: What is the amount of Isabella's net capital gains or losses for 2018?

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?

Cliff owned investment stock purchased three years ago for $16,000 and bonds purchased six months ago for $9,800. When he needed money recently, he sold the stock for $13,800 and the bonds for $10,100. What is the amount and type of net gain or loss that Cliff will include in computing his taxable income?

Angel sells the following depreciable assets from her sole proprietorship: Asset Cost Age Gain/Loss Office furniture $10,000 4 years ($2,400) Truck $20,000 5 years 3,100 Bakery equipment $25,000 9 months (4,500) What should Angel report on her income tax return relative to each of these property transactions?

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 inventory.

Ginger sold stock that she had purchased five years ago for $15,000 to her brother, Carl, for $12,000. The next month, Carl sold the stock for $11,000. What is the amount and type of gain or loss included in Carl's income from this sale?

Quidik Corporation sold a machine for $80,000 that it had acquired three years ago for $68,000. If its adjusted basis when sold was $50,000, what should Quidik report on its tax return as a result of this sale?

Abby has a $10,000 loss on some collectibles, a $5,000 Sec. 1202 gain, and an $11,000 gain on some securities. If all gains and losses are long-term and Abby is in the 24 percent tax bracket, how is her net gain taxed?

Wally (who is in the 24 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?

Individuals can only deduct capital losses to the extent of capital gains plus $3,000.

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 machine used by a business for four years sold at a price less than its original cost.

Liam used his auto 70 percent for business and 30 percent for personal use. He purchased it for $15,000 and has taken $5,460 of depreciation on it. What is his recognized gain on a sale for $12,000 and what is its character?