Exam 21: Property Transactions: Capital Gains and Losses

Jordan paid $30,000 for equipment two years ago and has claimed total depreciation deductions of $15,600 for the two years.The cost of repairs during the same time period was $2,000 while a major overhaul which extended the life of the equipment cost $7,000.What is Jordan's adjusted basis in the equipment at the end of the two-year period?

Nate sold two securities in 2019: Purchased Sold Sales Price Basis MASH 1-1-2018 5-10-2019 \ 12,000 \ 10,000 KMZ 12-2-2018 9-22-2019 \ 4,000 \ 5,000 Nate has a 24% marginal tax rate.What is the additional tax resulting from the above sales?

If an individual 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.

David gave property with a basis of $133,000 to Hannah when the property had a FMV of $100,000 and paid gift taxes of $8,000.If Hannah later sells the property for $140,000,Hannah's basis (to determine gain)in the property immediately before the sale is

All realized gains and losses are recognized for tax purposes.

Edward purchased stock last year as follows: Month Shares Total Cost March 100 \ 270 July 200 600 October 600 \ 1,200 In April of this year,Edward sells 80 shares for $250.Edward cannot specifically identify the stock sold.The basis for the 80 shares sold is

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

Gertie has a NSTCL of $9,000 and a NLTCG of $5,500 during the current taxable year.After gains and losses are offset,Gertie reports

Rana purchases a 5%,$100,000 corporate bond at issuance on January 1,2019 for $91,500.The bond matures in five years.In 2019 Rana will recognize interest income of

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

How long must a capital asset be held to qualify for long-term treatment?

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

Dustin purchased 50 shares of Short Corporation for $500.During the current year,Short declared a nontaxable 10% stock dividend.What is the basis per share before and after the stock dividend is distributed?

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

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.

Rita,who has a marginal tax rate of 37%,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?

Antonio is single and has taxable income of $170,000 without considering the sale of a capital asset (land held for investment)in September of 2019 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 any additional Medicare tax)is

An individual taxpayer who is not a dealer in real estate plans to subdivide a parcel of land into four lots and sell them at a substantial gain.The parcel of land had been held six years.In order to qualify for capital gain treatment,the individual must satisfy all of the requirements except

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

In the current year,Andrew received a gift of property from his uncle.At the time of the gift,the property had a FMV of $115,000 and an adjusted basis to his uncle of $70,000.After deducting the annual exclusion,the amount of the gift was $100,000.Andrew's uncle paid a gift tax on the property of $24,000.What is the amount of Andrew's basis in the property?