Exam 8: Property Transactions: Capital Gains and Losses

An individual has the following recognized gains and losses from disposition of § 1231 assets all the assets were vacant land): $15,000 gain, $10,000 loss, $25,000 gain, and $2,000 loss.The individual has a $5,500 § 1231 lookback loss.The individual also has a $16,000 net short-term capital loss from the disposition of stock.Which of the following statements is correct?

The possible holding periods for capital assets include:

When a patent is transferred, the most common forms of payment received by the transferor are a lump sum and/or periodic payment.

Which of the following is not a "tax status" for an asset?

Rental use depreciable machinery held more than 12 months is an example of a § 1231 asset.

Property sold to a related party that is depreciable by the purchaser may cause the seller to have ordinary gain.

If § 1231 asset casualty gains and losses net to a gain, the gain is treated as a § 1231 gain.

An individual had the following gains and losses during 2018 on property held for the long-term holding period: sale of Orange common stock $8,000 gain); sale of real property used in the taxpayer's business $1,800 loss); destruction of real property used in the taxpayer's business by fire $1,000 loss).Which of the following statements is correct?

Sara is filing as head of household and has 2018 taxable income of $57,000 which includes $3,000 of net long-tem capital gain.The net long-term capital gain is made up of $1,000 25% gain and $2,000 0%/15%/20% gain.What is the tax on her taxable income using the alternative tax method? Note: Use the tax rate schedule rather than the tax table.

An individual taxpayer with 2018 net short-term capital loss of $5,000 generally can deduct up to $3,000 for AGI and carry the balance forward to 2019.

Short-term capital gain is eligible for a special tax rate only when it exceeds long-term capital gain.

Involuntary conversion gains may be deferred if the proceeds of the involuntary conversion are reinvested.

Section 1231 property generally does not include artistic compositions.

Personal use property casualty gains and losses are not subject to the § 1231 rules.

A business taxpayer sells depreciable business property with an adjusted basis of $40,000 for $32,000.The taxpayer held the property for more than a year.The taxpayer has an $8,000 capital loss.

Virgil was leasing an apartment from Marple, Inc.Marple paid Virgil $1,000 to cancel his lease and move out so that Marple could demolish the building.As a result:

Which of the following assets held by a manufacturing business is a § 1231 asset?

Section 1245 applies to amortizable § 197 intangible assets.

Assume a building is subject to § 1250 depreciation recapture because bonus depreciation [§ 168k)]was used.The building is destroyed in a hurricane and this is the taxpayer's only casualty or theft for the year.In which of the following situations could there be a § 1250 depreciation recapture gain?

In order to be long-term, the holding period must include at least parts of two tax years.