FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 8: Capital Gains and Losses

Show Answer

Share

---

All types

Filters

Study Flashcards

Question 1

True/False

Review LaterAdd Note

Review Later

To have the like-kind exchange provisions apply,a taxpayer must make an election.

Correct Answer

verified

Show Answer

Question 2

Essay

Review LaterAdd Note

Review Later

Indicate whether a gain or loss realized in each of the following situations would be long-term or short-term by putting an "X" on the appropriate blank line: ​

Correct Answer

verified

a.Long-term b.Short-term c.Short-term d.Long-term e.Long-term

Question 3

Multiple Choice

Review LaterAdd Note

Sol purchased land as an investment on January 12,2011 for $85,000.On January 31,2017,Sol sold the land for $30,000 cash.In addition,the purchaser assumed the mortgage of $70,000 on the land.What is the amount of the realized gain or loss on the sale?

In December,2017,Ben and Jeri (married filing jointly) have a long-term capital gain of $55,000 on the sale of stock held for 4 years.They have no other capital gains and losses for the year.After standard deduction and personal exemptions,their ordinary income for the year,before the capital gain,is $75,900,making their total income for the year $130,900, ($75,900 + $55,000) .In 2017,married taxpayers who file jointly pay tax of $10,452.50 at 10 percent and 15 percent rates (from the tax rate schedules) on the first $75,900 of ordinary taxable income and 25 percent on ordinary taxable income up to $153,100.What is their total tax liability?

Which of the following is not true about capital assets?

If the following are capital assets,mark with a "Yes." If they are not capital assets,mark with a "No." a.A taxpayer's personal jet ski ______ b.Ford Motor Credit Company bond held by an investor ______ c.A baseball for sale at Sports.com ______ d.J.K.Rowling's personal copy of her original manuscript of Harry Potter and the Sorcerer's Stone ______ e.An antique grandfather clock inherited from the taxpayer's aunt ______

Bennett purchased a tract of land for $20,000 in 2011 when he heard that a new highway was going to be constructed through the property and the land would soon be worth $200,000.The highway project was abandoned in 2017 and the value of the land fell to $15,000.Bennett can claim a loss in 2017 of:

Terry has a casualty gain of $1,000 and a casualty loss of $5,500,before the $100 floor and before the adjusted gross income limitation.The gain and loss were the result of two separate casualties occurring during the current year and both properties were personal-use assets.If Terry itemizes deductions on her current year return and has adjusted gross income of $25,000,what is Terry's gain or net itemized deduction as a result of these casualties?

Stewart,age 44,sells his personal residence of 4 years on June 14,2017,for $190,000.The expenses of sale are $15,000 and he has paid for capital improvements of $3,000.Stewart purchased the residence for $100,000.On February 2,2018,Stewart purchases and occupies a new residence at a cost of $200,000. a.Calculate the gain realized on the sale of Stewart's residence. b.How much gain must be recognized on the sale of Stewart's residence? c.Calculate Stewart's basis in the new residence.

Which one of the following qualifies as a like-kind exchange?

At the end of the current year,Falstaff sold for $4,800 General Martin stock that was purchased 5 months ago for $4,000.He also sold Cedar stock for $6,000 at the same time.The Cedar stock cost $4,000,2 years ago.In addition,Falstaff has a short-term capital loss of $500 on the sale of silver. a.Calculate the amount of Falstaff's net short-term and net long-term capital gain or loss. b.If Falstaff has a net capital gain,what is the maximum rate at which the gain will be taxed?

For purposes of taxation of capital gains:

There is no limit on the amount of capital losses that an individual may deduct against ordinary income.

Carlos bought a building for $113,000 in 2013.He added an addition to the building for $26,000.In 2017,he sold it for $212,000.What was his long-term capital gain (ignore depreciation) ?

Martha has a net capital loss of $20,000 and other ordinary taxable income of $45,000 for the current tax year.What is the amount of Martha's taxable income after deducting the allowed capital loss?

After 4 years of life in the slow lane,Doug decided to give up his goat ranch and move back to the big city.He sold the goat milking machine for $1,000.The machine originally cost $1,200 and had $820 of accumulated depreciation at the time of sale. ​ a.What is the total gain or loss on the sale of the goat milking machine? b.Is the gain or loss treated as capital or ordinary? Explain.

Rod had the following loss on business-use property: ​ ​ ​ ​ Calculate the amount and nature of Rod's gain or loss as a result of this casualty. ​

Which of the following is true of a like-kind exchange:

Currently,long-term capital gains are not afforded preferential tax treatment.

Which of the following sales results in a short-term gain/loss?