Exam 10: Property Transactions: Capital Gains and Losses

Chen had the following capital asset transactions during 2014: What is the adjusted net capital gain or loss and the related tax due to the above transactions,assuming Chen has a 25% marginal tax rate?

Jade is a single taxpayer in the top tax bracket,with salary of $450,000 and investment income of $100,000. She is considering the sale of some shares of stock which will result in a $50,000. She purchased the shares three years ago. Taking all taxes into account,how much tax will she pay due to this gain?

In a basket purchase,the total cost is apportioned among the assets purchased according to the relative adjusted basis of the assets.

Emma Grace acquires three machines for $80,000,which have FMVs of $32,000,$28,000,and $20,000 respectively.The delivery cost is $500,and installation costs amount to $2,500.What is the basis of each machine?

All recognized gains and losses must eventually be classified either as capital or ordinary.

Gains and losses are recognized when property is disposed of by gift or bequest.

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.

Everest Inc.is a corporation in the 35% marginal tax bracket. It sold two stockholdings this year,resulting in a long-term capital gain of $15,000 on stock A and a short-term capital loss of $5,000 on stock B. What is the extra tax that Everest will pay due to the sales of these stocks?

Andrea died with an unused capital loss carryover of $3,300.The carryover

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

Tina 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 Tina sells the property for $200,000,her realized gain or loss will be

Rita,who has marginal tax rate of 39.6%,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?

Which one of the following does not affect the adjusted basis of a house held as rental property?

On July 25,2013,Marilyn gives stock with a FMV of $7,500 and a basis of $5,000 to her nephew Darryl.Marilyn had purchased the stock on March 18,2013.Darryl sold the stock on April 18,2014 for $7,800.As a result of the sale,what will Darryl report on his 2014 tax return?

The taxable portion of a gain from qualified small business stock is taxed at a top tax rate of

Billy and Sue are married and live in Texas,a community property state.They jointly own real property with an adjusted basis of $200,000.When the property has a FMV of $450,000,Billy dies leaving all of the property to Sue.If she later sells the property for $650,000,what is Sue's gain on the sale?

Richard exchanges a building with a basis of $35,000,and subject to a liability of $25,000,for land with a FMV of $50,000 owned by Bill. Bill takes the building subject to the liability.What is the amount of Richard's realized gain?

Terra Corp.purchased a new enterprise software system and incurred the following costs: What is Terra Corp.'s basis in the software system?

Trista,a taxpayer in the 33% marginal tax bracket sold the following capital assets this year: What is the amount of and nature of (LT or ST)capital gain or loss? Be specific as to the rates at which gains,if any,are taxed.

Funds borrowed and used to pay for an asset are not included in the cost until the borrowed funds are repaid.