Exam 5: Property Transactions: Capital Gains and Losses

In 2011,Regina purchased a home in Las Vegas which cost $280,000.Due to increase in the market value of the home,she refinanced her mortgage and her debt on the home totaled $300,000 at the end of 2013.Regina accepted a new job in Dallas in April 2014.Unable to sell her home,she rented it in November 2014,at which time its fair market value was $240,000.In June 2016,she sold the home for $230,000.What tax issues should Regina consider?

Antonio is single and has taxable income of $150,000 without considering the sale of a capital asset (land held for investment)in September of 2016 for $25,000.That asset was purchased six years earlier and has a tax basis of $5,000.The tax liability applicable to only the capital gain (without consideration of the additional Medicare tax)is

Amanda,whose tax rate is 33%,has NSTCL of $25,000,a $30,000 LTCG from sale of a rare coin held 15 months and a $18,000 LTCG from the sale of stock held for three years.By what amount will Amanda's tax liability increase?

Gain on sale of a patent by an inventor generally is ordinary income.

During the current year,Tony purchased new car wash equipment for use in his service station business.Tony's costs in connection with the new equipment this year were as follows: What is Tony's basis in the car wash equipment?

Michelle purchased her home for $150,000,and subsequently added a garage costing $25,000 and a new porch costing $5,000.Repairs to the home's plumbing cost $1,000.The adjusted basis in the home is

Galvin Corporation has owned all of the stock of Rialto Corporation for five years.Rialto Corporation has been actively engaged in manufacturing in Kansas,but it is now bankrupt,and the stock is worthless.Galvin Corporation will recognize a long-term capital loss.

Andrea died with an unused capital loss carryover of $3,300.The carryover

On July 25,2015,Karen gives stock with a FMV of $7,500 and a basis of $8,000 to her nephew Bill.Karen had purchased the stock on March 18,2015.Bill sold the stock on April 18,2016 for $6,000.As a result of the sale,what must Bill report on his 2016 tax return?

Dennis purchased a machine for use in his business.Mr.Dennis' costs in connection with this purchase were as follows: What is the amount of Mr.Dennis' basis in the machine?

Jessica owned 200 shares of OK Corporation with a basis of $12,000 and a FMV of $24,000.Jessica received 20 stock rights as a nontaxable distribution with a total FMV of $8,000.Jessica sold the stock rights for $4,000.Jessica's gain or loss on the sale was

Stella has two transactions involving the sale of capital assets during the year resulting in a STCL of $5,200 and LTCL of $2,400.As a result,Stella can offset

If property received as a gift has a basis of the fair market value of the property on the date of the gift,the donee's holding period starts on the day after the date of the gift.

Expenditures which do not add to the value or prolong the life of property may be expensed in the year in which they are incurred.

Bob owns 100 shares of ACT Corporation common stock with a basis of $3,500 and a FMV of $12,000.Bob receives 10 stock rights as a nontaxable distribution,and no basis is allocated to the stock rights.With each stock right,Bob may acquire one share of stock for $25.Bob exercises all 10 stock rights.The total basis of the newly acquired stock is

Dale gave property with a basis of $16,000 to Sarah when it had a FMV of $12,000.No gift taxes were due.Sarah later sold the property for $22,000 resulting in a recognized gain of

Maya expects to report about $2 million of AGI and $1.7 million of taxable income.Her AGI is composed of $1.25 million of salary,and the balance is investment income.Maya is thinking about selling some stock before year-end.She purchased the stock three years ago and expects to recognize a $500,000 gain.How much federal tax will she pay in total on the stock gain?

Adjusted net capital gain is taxed at 15% for individual taxpayers with marginal tax rates of 15% or higher,but less than 39.6%.

Kathleen received land as a gift from her grandfather.At the time of the gift,the land had a FMV of $85,000 and an adjusted basis of $110,000 to Kathleen's grandfather.One year later,Kathleen sold the land for $80,000.What was her gain or (loss)on this transaction?

Antonio owns land held for investment with a basis of $28,000.The city of Lafayette exercises the right of eminent domain and Antonio receives a payment of $48,000.What is Antonio's realized gain?