During the current year,Nancy had the following transactions: \[\begin{array} {| l | r| } \hline \text { Short-term capital loss } & ( \$ 1,800 ) \\ \hline \text { Short-term capital gain } & 3,600 \\ \hline \text { Short-term capital loss carryover from last year } & ( 2,200 ) \\ \hline \text { Long-term capital gain } & 7,000 \\ \hline \text { Long-term capital loss } & ( 15,000 ) \\ \hline \end{array}\] What is the amount of her capital loss deduction for the current year,and what is the amount and character of her capital loss carryover?

A) \[\begin{array} { | l | l | } \hline \text { Deduction } & \text { Carryover } \\ \hline \$ 4,000 & \$ 400 \text { short-term and } \$ 5,000 \text { long- } \\ &\text { term }\\\hline \end{array}\] B) \[\begin{array} { | l | l | } \hline \text { Deduction } & \text { Carryover } \\ \hline \$ 3,000 & \$ 5,400 \text { LTCL carryover } \\ \hline \end{array}\] C) \[\begin{array} {| l | l |} \hline \text { Deduction } & \text { Carryover } \\ \hline \$ 3,000 & \$ 5,000 \text { long-term }\\\hline \end{array}\] D) \[\begin{array} { | l | l | } \hline \text { Deduction } & \text { Carryover } \\ \hline \$ 12,100 & \$ 0 \\ \hline \end{array}\] A) \[\begin{array} { | l | l | } \hline \text { Deduction } & \text { Carryover } \\ \hline \$ 4,000 & \$ 400 \text { short-term and } \$ 5,000 \text { long- } \\ &\text { term }\\\hline \end{array}\] B) \[\begin{array} { | l | l | } \hline \text { Deduction } & \text { Carryover } \\ \hline \$ 3,000 & \$ 5,400 \text { LTCL carryover } \\ \hline \end{array}\] C) \[\begin{array} {| l | l |} \hline \text { Deduction } & \text { Carryover } \\ \hline \$ 3,000 & \$ 5,000 \text { long-term }\\\hline \end{array}\] D) \[\begin{array} { | l | l | } \hline \text { Deduction } & \text { Carryover } \\ \hline \$ 12,100 & \$ 0 \\ \hline \end{array}\]

Exam 21: Property Transactions: Capital Gains and Losses

Douglas and Julie are a married couple who live in Louisiana,a community property state.They jointly own property with an adjusted basis of $140,000.On December 2 of this year,Julie died when the property had a fair market value of $160,000.Douglas's basis in the property after Julie's death is

(Multiple Choice)

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Question 41

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

(Multiple Choice)

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Question 42

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?

(Multiple Choice)

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Question 43

Losses are generally deductible if incurred in carrying on a trade or business or incurred in an activity engaged in for profit.

(True/False)

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Question 44

During the current year,Don's aunt Natalie gave him a house.At the time of the gift,the house had a FMV of $145,000 and his aunt's adjusted basis was $134,000.After deducting the annual exclusion,the amount of the gift was $130,000.His aunt paid a gift tax of $20,000 on the house.What is Don's basis in the house for purposes of determining gain?

(Multiple Choice)

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Question 45

Darla sold an antique clock in 2019 for $3,000.She had purchased the clock in 2009 for $2,000.If she is otherwise in the 32% marginal tax bracket,what is the maximum tax rate on the capital gain on the sale of the clock?

(Multiple Choice)

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Question 46

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

(Multiple Choice)

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Question 47

Bev owns approximately $13 million of assets primarily composed of a very valuable parcel of real estate and a savings account of $500,000.Bev has four grandchildren and is planning to give them each an annual gift in equal amounts.Bev can gift $100,000 in total in 2019 to her grandchildren without creating taxable gifts.

(True/False)

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Question 48

Josh purchases a personal residence for $278,000 but subsequently converts the property to rental property when its FMV is $275,000.Assume depreciation of $65,000 has been deducted after conversion to rental use.If Josh sells the property for $280,000,his gain or loss will be

(Multiple Choice)

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Question 49

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.

(True/False)

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Question 50

During the current year,Nancy had the following transactions: Short-term capital loss (\ 1,800) Short-term capital gain 3,600 Short-term capital loss carryover from last year (2,200) Long-term capital gain 7,000 Long-term capital loss (15,000) What is the amount of her capital loss deduction for the current year,and what is the amount and character of her capital loss carryover?

(Multiple Choice)

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Question 51

Candice owns a mutual fund that reinvests her dividends and capital gains earned during the year.The mutual fund reported to her that her share of earnings was: $500 in dividends,$1,500 in short-term net capital gains,and $1,300 in long-term net capital gains.She reported the items on her tax return and paid the appropriate tax on these earnings.If her basis in the fund was $25,000 at the beginning of the year,what is her basis at the end of the year?

(Multiple Choice)

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Question 52

If Houston Printing Co.purchases a new printing press during the current year for $30,000,pays sales taxes of $2,000,and pays $1,000 for installation,the cost basis for the printing press is $33,000.

(True/False)

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Question 53

If the stock received as a nontaxable stock dividend is not the same type as the stock owned prior to the dividend,the allocation of basis is based on relative fair market values of the stock.

(True/False)

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Question 54

Erik purchased qualified small business corporation stock on December 1,2010 and sold it for a $500,000 gain on December 12,2019.The gain subject to tax is

(Multiple Choice)

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Question 55

Will exchanges a building with a basis of $35,000,and subject to a liability of $30,000,for land with a FMV of $50,000 owned by Jane.Jane takes the land subject to the liability.The amount realized by Will is

(Multiple Choice)

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Question 56

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%.

(True/False)

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Question 57

Adam purchased 1,000 shares of Airco Inc.common stock for $22,000 on February 3,2014.On April 1,2019,Adam received 100 new shares in a nontaxable stock dividend.As of April 1,the stock was trading at $25 per share.Adam sells the 100 new shares on June 15,2019 for $2,400.Due to the stock sale,Adam will recognize a

(Multiple Choice)

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Question 58

A building used in a trade or business is a capital asset.

(True/False)

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Question 59

On July 25,2018,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 18,2018.Bill sold the stock on April 18,2019 for $6,000.As a result of the sale,what must Bill report on his 2019 tax return?

(Multiple Choice)

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Question 60

Showing 41 - 60 of 136

Exam 21: Property Transactions: Capital Gains and Losses

Douglas and Julie are a married couple who live in Louisiana,a community property state.They jointly own property with an adjusted basis of $140,000.On December 2 of this year,Julie died when the property had a fair market value of $160,000.Douglas's basis in the property after Julie's death is

Losses are generally deductible if incurred in carrying on a trade or business or incurred in an activity engaged in for profit.

Darla sold an antique clock in 2019 for $3,000.She had purchased the clock in 2009 for $2,000.If she is otherwise in the 32% marginal tax bracket,what is the maximum tax rate on the capital gain on the sale of the clock?

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

Josh purchases a personal residence for $278,000 but subsequently converts the property to rental property when its FMV is $275,000.Assume depreciation of $65,000 has been deducted after conversion to rental use.If Josh sells the property for $280,000,his gain or loss will be

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.

If Houston Printing Co.purchases a new printing press during the current year for $30,000,pays sales taxes of $2,000,and pays $1,000 for installation,the cost basis for the printing press is $33,000.

If the stock received as a nontaxable stock dividend is not the same type as the stock owned prior to the dividend,the allocation of basis is based on relative fair market values of the stock.

Erik purchased qualified small business corporation stock on December 1,2010 and sold it for a $500,000 gain on December 12,2019.The gain subject to tax is

Will exchanges a building with a basis of $35,000,and subject to a liability of $30,000,for land with a FMV of $50,000 owned by Jane.Jane takes the land subject to the liability.The amount realized by Will is

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%.

A building used in a trade or business is a capital asset.

On July 25,2018,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 18,2018.Bill sold the stock on April 18,2019 for $6,000.As a result of the sale,what must Bill report on his 2019 tax return?

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