Exam 5: Property Transactions: Capital Gains and Losses

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.

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

The holding period of property received from a decedent is based on the actual time the property is held by the decedent.

On January 31 of this year, Jennifer pays $700 for an option to acquire 100 shares of Lifetime Corporation common stock for $70 per share. Jennifer exercises the option on June 2. Jennifer sells the stock on April 30 of next year for $10,000. Jennifer's basis for the stock immediately before the sale is

Armanti received a football championship ring in college. During difficult economic times, Armanti sold the ring at a pawn shop. What are the tax issues of the sale to Armanti?

Rick sells stock of Ty Corporation, which has an adjusted basis of $20,000, for $22,000. He pays a sales commission of $500. In computing his gain or loss, the amount realized by Rick is $1,500.

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

Gina owns 100 shares of XYZ common stock with a $12,000 basis and a $25,000 FMV. She receives 100 stock rights with a total FMV of $15,000. Answer the following: a. What is the basis of the 100 shares of stock? b. What is the basis of the 100 stock rights?

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?

If a nontaxable stock dividend is received and is not the same type of stock as that owned before the dividend, the original stock's basis is allocated to all shares

Mike sold the following shares of stock in 2014: 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.

Monte inherited 1,000 shares of Corporation Zero stock from his father who died on March 4 of the current year. His father paid $30 per share for the stock on September 2, 2005. The FMV of the stock on the date of death was $50 per share. On September 4 this year, the FMV of the stock was $55 per share. The executor did not elect the alternate valuation date. Monte sold the stock for $65 per share on December 3. What is the amount and nature of any gain or loss?

Coretta sold the following securities during 2014: What is Coretta's net capital gain or loss result for the year?

Billy and Sue are married and live in Texas, a community property state. They jointly own real property with an adjusted basis of $200,000. When the property has a FMV of $450,000, Billy dies leaving all of the property to Sue. If she later sells the property for $650,000, what is Sue's gain on the sale?

Which one of the following does not affect the adjusted basis of a house held as rental property?

Corporate taxpayers may offset capital losses only against capital gains and may carry excess losses back three years and then forward five years.

Bad debt losses from nonbusiness debts are deductible as short-term or long-term capital losses depending on how long the debt was outstanding.

Sanjay is single and has taxable income of $13,000 without considering the sale of a capital asset in November of 2014 for $15,000. That asset was purchased six years earlier and has a tax basis of $5,000. The tax liability applicable to only the capital gain 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?

Terrell and Michelle are married and living in New York, which is a not a community property state. They jointly own property with an adjusted basis of $240,000. On December 2 of this year, Michelle died when the property had a fair market value of $260,000. Terrell's basis in the property after Michelle's death is