Exam 7: Capital Gains and Other Sales of Property Schedule D and Form 4797

Norman received shares of stock as a gift from his uncle in 2015.At the time of the gift,the stock had a FMV of $5,000.The uncle purchased the stock in 2013 and had a basis of $6,000.If Norman sells the stock for $7,000 in 2017,he will report a:

Jeannie purchased 1,000 shares in Course Developers for $10,000 on August 11,2016.The company went bankrupt on May 11,2017 with no hope of recovery for the shareholders.On what date is the stock deemed to be worthless and what is the nature of the loss?

Section 1221 assets are any asset used in a trade or business.

Majoo inherited property from his uncle on August 15,2017.His uncle purchased the property on December 10,2015 for $100,000.At the date of his death,the property's FMV was $102,000.Majoo sold the property on September 30,2017 for $105,000. a.What is the gain on the sale of the property? b.What is the nature of the gain?

Lourdes,a sole proprietor,collected $8,650 on November 21,2017 on some of her outstanding receivables.Her basis in these receivables was $0.What is the gain or loss Lourdes recognizes for 2017?

In 2014,Moana purchased land for $99,500 for use in her business.She sold it in 2017 for $115,900.What is the gain on the sale before any netting?

Wyatt sold 300 shares of Clothes and More Inc. ,in 2016 for $30,000.Wyatt's investment portfolio includes the following purchases of Clothes and More Inc. ,stock: 2009 100 shares@80 per share 2010 75 shares @75 per share 2011 125 shares @67 per share 2012 100 shares @85 per share Assuming Wyatt does not identify which shares he sold,he will recognize a(an)

If Section 1231 losses exceed Section 1231 gains,the excess is treated as an ordinary loss.

Section 1202 allows for an exclusion of up to 50% of the eligible gain on the sale or exchange of qualified small business stock if held for more than one year.

Elandra purchased 500 shares in Prompt Messenger Services for $12,000 on November 21,2016.The company went bankrupt on June 12,2017,with no hope of recovery for the shareholders.On what date is the stock deemed to be worthless and what is the nature of the loss?

Hiroko,a single taxpayer,has wage income of $80,000.In addition,she has $5,000 in long-term capital losses,$4,000 in long-term capital gains,and $4,000 in short-term capital gains.What is Hiroko's AGI for 2017?

The donee's basis in depreciated property (when the FMV at the time of the gift is less than the donor's basis)is FMV at the time of the gift.

Greg sold some equipment for $72,510 on June 13,2017.Greg had originally purchased the equipment for $86,750 on November 21,2016.The equipment was subject to depreciation of $17,350.What gain or loss will Greg recognize on the sale?

In 2012,Terri purchased 260 shares of Flowers R Us stock at a cost of $9,600 as an investment.In 2017,when the fair market value was $11,400,Terri gave the stock to her daughter,Michele.Assuming no gift tax was paid,if Michele sells the stock for $13,800,she will recognize:

The forms used to report a gain or loss on the sale of an asset depend on the classification of the asset being sold rather than on how the asset was used prior to sale.

Leslie buys a painting from a collector for resale in her gallery.She purchased the painting for $5,000 and sold it 24 months later for $9,000.What are the nature and the amount of the gain on the sale?

Keiko sells a piece of equipment used in her business for $14,853 on August 10,2017.The equipment was purchased on January 4,2016 at a cost of $12,849.Keiko has taken $3,855 of depreciation on the equipment.What is the amount and classification of the gain on the sale by Keiko?

Section 1231 property is:

Shanstella bought a 4-unit apartment building in July 2008 for $360,000 and sold it for $480,000 in 2017.There was $96,541 of accumulated straight-line depreciation on the apartment building.Assuming that Shanstella is in the 33% tax bracket,how much of her gain is taxed at 25%?

Patty and Rich,married filing jointly,have $385,000 in MAGI and $90,000 of net investment income (NII).They will pay a surtax of: