This year,Lauren sold several shares of stock held for investment.The following is a summary of her capital transactions for 2019: \[\begin{array} { | c | c | c | r | } \hline \text { Acquired } & \text { Sold This Year } & \text { Selling Price } & \text { Cost } \\ \hline 09 / 25 / 2019 & 12 / 2019 & \$ 800 & \$ 1,000 \\ \hline 02 / 15 / 2019 & 07 / 2019 & 2,200 & 1,75 \mathrm { C } \\ \hline 06 / 25 / 2014 & 08 / 2019 & 3,500 & 2,300 \\ \hline 12 / 28 / 2015 & 06 / 2019 & 750 & 900 \\ \hline \end{array}\] What are the amounts of Lauren's capital gains (losses)for this year?

A) \[\begin{array} { | l | l | } \hline \text { NLTG } & \text { NSTG } \\ \hline \$ 1,300 & \$ 0 \\ \hline \end{array}\] B) \[\begin{array} {| l | l | } \hline \text { NLTG } & \text { NSTG } \\ \hline \$ 850 & \$ 450 \\ \hline \end{array}\] C) \[\begin{array} {| l | l | } \hline\text { NLTG } & \text { NSTG } \\ \hline \$ 1,050 & \$ 250 \\ \hline \end{array}\] D) \[\begin{array} { | l | l | } \hline \text { NLTG } & \text { NSTG } \\ \hline ( \$ 1,050 ) & ( \$ 250 ) \\ \hline \end{array}\] A) \[\begin{array} { | l | l | } \hline \text { NLTG } & \text { NSTG } \\ \hline \$ 1,300 & \$ 0 \\ \hline \end{array}\] B) \[\begin{array} {| l | l | } \hline \text { NLTG } & \text { NSTG } \\ \hline \$ 850 & \$ 450 \\ \hline \end{array}\] C) \[\begin{array} {| l | l | } \hline\text { NLTG } & \text { NSTG } \\ \hline \$ 1,050 & \$ 250 \\ \hline \end{array}\] D) \[\begin{array} { | l | l | } \hline \text { NLTG } & \text { NSTG } \\ \hline ( \$ 1,050 ) & ( \$ 250 ) \\ \hline \end{array}\]

Exam 21: Property Transactions: Capital Gains and Losses

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When an individual taxpayer has NSTCL and NLTCG,the loss is offset against NLTCG from the 28% group,then NLTCG from the 25% group,and finally against NLTCG from the 15% or 20% group.

(True/False)

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Question 121

With regard to taxable gifts after 1976,no gift tax is added to the basis of the property if the donor's basis is greater than the FMV of the property.

(True/False)

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Question 122

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?

(Multiple Choice)

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Question 123

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.

(True/False)

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Question 124

This year,Lauren sold several shares of stock held for investment.The following is a summary of her capital transactions for 2019: Acquired Sold This Year Selling Price Cost 09/25/2019 12/2019 \ 800 \ 1,000 02/15/2019 07/2019 2,200 1,75 06/25/2014 08/2019 3,500 2,300 12/28/2015 06/2019 750 900 What are the amounts of Lauren's capital gains (losses)for this year?

(Multiple Choice)

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Question 125

Jade is a single taxpayer in the top tax bracket,with salary of $550,000 and investment income of $100,000.She is considering the sale of some shares of stock which will result in a $50,000 gain.She purchased the shares three years ago.Taking all taxes into account,how much tax will she pay due to this gain?

(Essay)

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Question 126

If the shares of stock sold or exchanged are not specifically identified,the FIFO (first-in,first-out)method of identification must be used.

(True/False)

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Question 127

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

(True/False)

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Question 128

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 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 the additional Medicare tax)is

(Multiple Choice)

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Question 129

Net long-term capital gains receive preferential tax treatment if they exceed net short-term capital losses.

(True/False)

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Question 130

A taxpayer purchased an asset for $50,000 several years ago.He is now planning to sell it.Under the recovery of basis doctrine the taxpayer will not recognize any gain or pay any related taxes unless he sells the asset for more than $50,000.

(True/False)

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Question 131

If the shares of stock sold or exchanged are not specifically identified,the average cost method of identification must be used.

(True/False)

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Question 132

Luly will report $800,000 of taxable income in 2019.Included in the taxable income is one sale of an investment asset.Luly sold a building she had owned for three years,resulting in a $100,000 unrecaptured Sec.1250 gain.Her tax on the gain (without consideration of the additional Medicare tax)will be

(Multiple Choice)

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Question 133

Mike,a dealer in securities and calendar-year taxpayer,purchased a security for inventory on November 18,2018 for $15,000.The FMV on December 31,2018 was $16,000.The security was sold on December 19,2019 for $16,500.These transactions result in

(Multiple Choice)

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Question 134

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

(True/False)

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Question 135

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

(Multiple Choice)

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Question 136

Showing 121 - 136 of 136

Exam 21: Property Transactions: Capital Gains and Losses

When an individual taxpayer has NSTCL and NLTCG,the loss is offset against NLTCG from the 28% group,then NLTCG from the 25% group,and finally against NLTCG from the 15% or 20% group.

With regard to taxable gifts after 1976,no gift tax is added to the basis of the property if the donor's basis is greater than the FMV of the property.

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.

If the shares of stock sold or exchanged are not specifically identified,the FIFO (first-in,first-out)method of identification must be used.

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

Net long-term capital gains receive preferential tax treatment if they exceed net short-term capital losses.

A taxpayer purchased an asset for $50,000 several years ago.He is now planning to sell it.Under the recovery of basis doctrine the taxpayer will not recognize any gain or pay any related taxes unless he sells the asset for more than $50,000.

If the shares of stock sold or exchanged are not specifically identified,the average cost method of identification must be used.

Mike,a dealer in securities and calendar-year taxpayer,purchased a security for inventory on November 18,2018 for $15,000.The FMV on December 31,2018 was $16,000.The security was sold on December 19,2019 for $16,500.These transactions result in

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

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

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