Exam 5: Property Transactions: Capital Gains and Losses

Rita,who has marginal tax rate of 39.6%,is planning to make a gift to her grandson who is in the lowest tax bracket.Which of the following holdings of stock would be the most tax advantageous gift from Rita's perspective?

Donald has retired from his job as a corporate manager.He buys and sells stocks on a daily basis.He spends 8-9 hours daily studying prospective stock purchases and market news.What tax issues should Donald consider?

Trista,a taxpayer in the 33% marginal tax bracket sold the following capital assets this year: What is the amount of and nature of (LT or ST)capital gain or loss? Be specific as to the rates at which gains,if any,are taxed.

In a common law state,jointly owned property left to the surviving spouse will have a basis after the estate is settled equal to

Generally,gains resulting from the sale of collectibles such as antiques,stamps,or artwork are taxed to individual taxpayers at a maximum rate of 25%.

Sergio acquires a $100,000 Ternco Corporation bond (5%,20-year bond)on January 1,2016 for $75,000.The bond had been issue on January 1,2014.If Sergio hold the bond to maturity,at redemption he will recognize

If an indivdual taxpayer's net long-term capital losses exceed the net short-term capital gains,the excess may be offset against ordinary income up to $3,000 per year.Any excess losses over $3,000 may be carried back three years and carried forward five years.

For purposes of calculating depreciation,property converted from personal use to business use will take on a basis equal to the greater of its FMV or its adjusted basis on the date of the conversion.

Mike sold the following shares of stock in 2016: What are the tax consequences of these transactions,assuming his marginal tax rate is (a)33% and (b)39.6%? Ignore the medicare tax on net investment income.

Renee is single and has taxable income of $480,000 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

Jack exchanged land with an adjusted basis of $65,000 subject to a liability of $22,000 for $50,000 (FMV)of stock owned by Hayden.Hayden takes the land subject to the liability.Jack incurs $500 of selling expenses.What is the amount of Jack's realized gain on the exchange?

Taj Corporation has started construction of a new mall with a cost estimate of $50 million.The mall is expected to be ready to open in 18 months.Taj cannot deduct the interest expense on the construction loan.

Normally,a security dealer reports ordinary income on the sale of securities unless it is specifically identified as a security being held for investment.

Brad owns 100 shares of AAA Corporation with a basis of $6,000 and a FMV of $24,000.Brad receives 15 stock rights as a nontaxable distribution with a total FMV of $6,000.Brad allows the stock rights to expire.Brad's loss recognized and the basis of the original 100 shares after expiration of the stock rights is

Kathleen received land as a gift from her grandfather.At the time of the gift,the land had a FMV of $105,000 and an adjusted basis of $85,000 to Kathleen's grandfather.The grandfather did not have any gift taxes due.One year later,Kathleen sold the land for $110,000.What was her gain or (loss)on this transaction?

Distinguish between the Corn Products doctrine and the ruling in the Arkansas Best Corporation case.

Mike,a dealer in securities and calendar-year taxpayer,purchased a security for inventory on November 18,2015 for $15,000.The FMV on December 31,2015 was $16,000.The security was sold on December 19,2016 for $16,500.These transactions result in

The taxable portion of a gain from qualified small business stock is taxed at a top tax rate of

A taxpayer sells an asset with a basis of $25,000 to an unrelated party for $28,000.The taxpayer has a realized gain of $3,000.

In the current year,ABC Corporation had the following items of income,expense,gains,and losses: What is taxable income for the year?