Exam 5: Property Transactions: Capital Gains and Losses

Abra Corporation generated $100,000 of taxable income from operations this year and realized a $4,000 loss on the sale of Starbucks stock.Abra Corporation will pay taxes on $97,000 of taxable income.

All of the following are capital assets with the exception of

Arthur,age 99,holds some stock purchased many years ago for $10,000 which is now worth $100,000.He is trying to plan for the eventual disposition of this stock.Arthur's only remaining family member is his grandson.For income tax purposes,Arthur should

Joel has four transactions involving the sale of capital assets during the year resulting in a STCG of $5,000,a STCL of $12,000,a LTCG of $1,800 and a LTCL of $1,000.As a result of these transactions,Joel will

Erik purchased qualified small business corporation stock on December 1,2010 and sold it for a $500,000 gain on December 12,2016.The gain subject to tax is

Margaret died on September 16,2016,when she owned securities with a basis of $50,000 and a FMV of $60,000.Caroline inherited the property and sold it on December 19,2016 for $67,000.What is Caroline's reported gain on this sale?

Which one of the following is a capital asset?

With regard to taxable gifts after 1976,no gift tax is added to the basis of the property if the donor's basis is greater than the FMV of the property.

Five different capital gain tax rates could apply to long-term capital assets sold by noncorporate taxpayers.

Max sold the following capital assets this year: What is the amount of and nature of (LT or ST)capital gain or loss?

Allison buys equipment and pays cash of $50,000,signs a note of $10,000 and assumes a liability on the property for $3,000.In addition,Allison pays an installation cost of $500 and a delivery cost of $800.Allison's basis in the asset is

Emma Grace acquires three machines for $80,000,which have FMVs of $32,000,$28,000,and $20,000 respectively.The delivery cost is $500,and installation costs amount to $2,500.What is the basis of each machine?

Rana purchases a 5%,$100,000 corporate bond at issuance on January 1,2016 for $91,500.The bond matures in five years.In 2016 Rana will recognize interest income of

A taxpayer reports capital gains and losses on

The gain or loss on an asset purchased on March 31,2015,and sold on March 31,2016,is classified as short-term.

This year,Lauren sold several shares of stock held for investment.The following is a summary of her capital transactions for 2016: What are the amounts of Lauren's capital gains (losses)for this year?

If the shares of stock sold or exchanged are not specifically identified,the FIFO (first-in,first-out)method of identification must be used.

Darla sold an antique clock in 2016 for $3,000.She had purchased the clock in 2009 for $2,000.If she is otherwise in the 33% marginal tax bracket,what is the maximum tax rate on the capital gain on the sale of the clock?

Capital recoveries increase the adjusted basis of an asset.

Courtney sells a cottage at the lake that the family had used for their summer vacations.The purchaser paid Courtney $100,000 and assumed the mortgage which had a principal balance of $50,000.Courtney had purchased the cottage five years ago for $170,000.Courtney will recognize