FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 16: Property Transactions: Capital Gains and Losses

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 31

Multiple Choice

Review LaterAdd Note

Review Later

In 2014,an individual taxpayer has $863,000 of taxable income that includes $48,000 of 0%/15%/20% long-term capital gain.Which of the following statements is correct?

A) All of the LTCG will be taxed at 0%.
B) All of the LTCG will be taxed at 15%.
C) All of the LTCG will be taxed at 20%.
D) Some of the LTCG will be taxed at 15% and some at 20%.
E) None of these.

F) A) and B)
G) B) and D)

Correct Answer

verified

Show Answer

Question 32

Multiple Choice

Review LaterAdd Note

Review Later

A lessor is paid $45,000 by its commercial tenant as a lease cancellation fee.The tenant wanted to get out of its lease so it could move to a different building.The lessor had held the lease for three years before it was canceled.The lessor had a zero tax basis for the lease.The lessor has received:

A) Ordinary income of $45,000.
B) Long-term capital gain of $45,000.
C) Short-term capital gain of $45,000.
D) Neither gain nor loss.
E) None of these.

F) C) and D)
G) A) and B)

Correct Answer

verified

Show Answer

Question 33

True/False

Review LaterAdd Note

Short-term capital losses are netted against long-term capital gains and long-term capital losses are netted against short-term capital gains.

Harold is a head of household,has $27,000 of taxable income in 2014 from non-capital gain or loss sources,and has the following capital gains and losses: $\begin{array}{lc}28 \% \text { long-term capital gain } & \$ 4,300 \\28 \% \text { long-term capital loss } & (2,000) \\0 \% / 15 \% / 20 \% \text { long-term capital gain } & 19,000 \\\text { Short-term capital loss } & (1,700)\end{array}$ What is Harold's taxable income and the tax on that taxable income?

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

36. On June 1, 2014, Brady purchased an option to buy 1,000 shares of General, Inc. at $40 per share. He purchased the option for $3,000. It was to remain in effect for five months. The market experienced a decline during the latter part of the year, so Brady decided to let the option lapse as of December 1, 2014. On his 2014 tax return, what should Brady report?

In 2014,Satesh has $5,000 short-term capital loss,$13,000 0%/15%/20% long-term capital gain,and $7,000 qualified dividend income.Satesh is single and has other taxable income of $15,000.Which of the following statements is correct?

Willie is the owner of vacant land that he purchased in 2010 for $1,400,000 and held for investment.On January 22,2013,he was paid $145,000 for a thirteen-month option on the land by Susan.Susan could buy the land for an additional $1,200,000 by exercising the option.Susan had hoped to build a luxury home on the land,but was unable to get approval to build a big enough home to satisfy her needs.Consequently,Susan did not exercise her option and the option expired on February 22,2014.(1)What is Willie's basis,gain or loss,and type of gain or loss from these events? (2)What is Susan's basis,gain or loss,and type of gain or loss from these events?

A worthless security had a holding period of 6 months when it became worthless on December 10,2014.The investor who had owned the security had a basis of $20,000 for it.Which of the following statements is correct?

For tax purposes,there is no original issue discount on a bond unless the bond is issued for less than its face value and the difference between the face value and the bond issue price is at least one-fourth of 1 percent of the redemption price at maturity multiplied by the number of years to maturity.

To compute the holding period,start counting on the day after the property was acquired and include the day of disposition.

"Collectibles" held long­term and sold at a gain are subject to maximum tax rate of 28%.An individual taxpayer recently sold an antique car for $40,000.The car had been held for several years and $30,000 was originally paid for it.Explain why the car is or is not a collectible.

The tax law requires that capital gains and losses be separated from other types of gains and losses because an alternative tax calculation may be used when taxable income includes net long-term capital gain.

Which of the following is correct concerning short sales of stock?

All collectibles short-term gain is subject to a potential alternative tax rate of 28%.

Stella purchased vacant land in 2007 that she subdivided for resale as lots.All 10 of the lots were sold during 2014.The lots had a tax basis of $12,000 each and sold for $35,000 each.Stella made no substantial improvements to the lots.She acted as her own real estate broker;so there were no sales expenses for selling the lots.Which of the following statements is correct?

Theresa and Oliver,married filing jointly,and both over 65 years of age,have no dependents.Their 2014 income tax facts are: $\begin{array}{lr}\text { Theresa's wages } & \$ 165,000 \\\text { Oliver's wages } & 33,000 \\\text { Short-term capital gain } & 36,000 \\\text { Long-term capital loss } & (41,000)\end{array}$ $\text { What is their taxable income for } 2014 \text { ? }$

A net short-term capital loss first offsets any 28% net long-term capital gain before it offsets either 25% net long-term capital gain or 0%/15%/20% net long-term capital gain.

Hiram is a computer engineer and,while unemployed,invents a switching device for computer networks.He patents the device,but does not reduce it to practice.Hiram has a zero tax basis for the patent.In consideration of $800,000 plus a $1 royalty per device sold,Hiram assigns the patent to a computer manufacturing company.Hiram assigned all substantial rights in the patent.Which of the following is correct?

Which of the following events causes the purchaser of an option to add the cost of the option to the basis of the property to which the option relates?