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

Gilberto invested in a mid-size local company with gross assets of $16,000,000.Gilberto purchased 1,000 shares for $48,000 in 2000.In 2016,Gilberto sold the stock for $78,000.How is the gain treated for tax purposes?

Keeley purchased 1,000 shares in FAM Inc.,for $10,000 on December 19,2015.The company went bankrupt on July 10,2016 with no hope of recovery for the shareholders. a.On what date is the stock deemed to be worthless? b.What is the nature of the loss?

In 2016,Carmen had a net capital loss of $10,000 and taxable income of $100,000.What is Carmen's loss carryforward to 2017?

Elandra purchased 500 shares in Prompt Messenger Services for $12,000 on November 21,2015.The company went bankrupt on June 12,2016,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?

If a taxpayer cannot specifically identify which shares of stock were sold,the average cost of all shares held is used as the adjusted basis of the shares that were sold.

Mikeala has taxable income of $73,240,without consideration of capital gain or loss transactions.Mikeala has a short-term capital gain of $11,000,a short-term capital gain of 3,000,and a long-term capital loss of $4,000. a.What is the net capital gainloss)included in taxable income? b.Is it short-term or long-term in nature? c.What is the amount and nature of any carryover? d.Assuming none of the gains or losses is from collectibles or unrecaptured Section 1250 property,at what tax rate will the gains or losses be taxed to Mikeala? Mikeala is in the 33% tax bracket for ordinary income.)

Glenn sells a piece of equipment used in his business for $31,500.The equipment was purchased on July 1,2014,at a cost of $22,000.Glenn has taken $6,600 of depreciation on the equipment.What are the amount and classification of the gain on the sale by Glenn?

Josephine gave her son,Shane 700 shares of Creative Marketing Inc.,common stock on May 26,2015.Josephine originally paid $9,000 for the stock on April 15,2015.At the date of the gift,the fair market value of the stock was $8,500.If no gift tax is paid and Shane sells the stock for $5,500 on May 26,2016,he will recognize:

To figure the gain or loss from the sale of property received as a gift,the donee must know the donor's adjusted basis as well as the FMV at the date of the gift.

Greg sold some equipment for $72,510 on June 13,2016.Greg had originally purchased the equipment for $86,750 on November 21,2015.The equipment was subject to depreciation of $17,350.What gain or loss will Greg recognize on the sale?

Before the tax implications of asset sales can be determined,which of the following must be determined?

If the taxpayer's aggregate Section 1231 gains for the year exceed aggregate Section 1231 losses for the year,all such gains and losses are considered to be ordinary.

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.

Greg received a gift of 300 shares of stock from his sister,Terri.The stock cost Terri $30,000 five years ago.At the date of the gift,the stock is worth $22,500. a.If the stock is sold for $34,000,calculate the amount and nature of the gain or loss. b.If the stock is sold for $20,000,calculate the amount and nature of the gain or loss. c.If the stock is sold for $28,000,calculate the amount and nature of the gain or loss.

In 2016,Daryl sold 425 shares of Basketball Heaven Mutual Fund for $18,000.He made the following purchases of Basketball Heaven stock: 2010 275 shares @ $50 per share 2011 125 shares @ $48 per share 2012 100 shares @ $55 per share Assuming Daryl uses the single category average cost method,he will realize:

Leslie buys a sculpture from a collector for resale in her gallery.She purchased the sculpture 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?

Sylvio purchased an apartment building as an investment in January 2010 for $383,500 and sold it for $475,000 in 2016.He reported $68,436 of allowed accumulated straight-line depreciation.If Sylvio is in the highest tax bracket for ordinary income,how much of his gain qualifies for preferential tax treatment?

Majoo inherited property from his uncle on August 15,2016.His uncle purchased the property on December 10,2014 for $100,000.At the date of his death,the property's FMV was $102,000.Majoo sold the property on September 30,2016 for $105,000. a.What is the gain on the sale of the property? b.What is the nature of the gain?

Anupay sold 900 shares of Stay-Rich Mutual fund for $85,600 in 2016.She purchased shares in the mutual fund in the following years. 2010 200 shares @ $105 2012 300 shares @ $100 2013 200 shares @ $110 2015 300 shares @ $88 2015 100 shares @ $95 all 2015 shares are considered to be held for > 1 year) a.Determine the amount of the gain or loss assuming Anupay uses the single category average cost method. b.Assuming there are no other Schedule D transactions,how much of a gain or loss will Anupay recognize on her Form 1040 for 2016? c.How much,if any of the gain or loss will be carried over to 2017?

Samson purchased some equipment for $86,749 on March 15,2015.He decided he did not need the equipment and sold it on March 10,2016 for $82,000.The equipment was subject to depreciation of $16,851 for 2015 and 2016.What gain or loss will Samson recognize on the sale of the equipment?