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Exam 11: Property Dispositions

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Question 21

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For depreciable real property,all depreciation taken must be recaptured and treated as ordinary income.

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Question 22

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Nicole has the following transactions related to her investments and her sole proprietorship during 2017: ​ a.Determine the character of each gain or loss: b.Determine the effect of the gains and losses on Nicole's current-year adjusted gross income.​

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The net effect of all of the transac...

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Question 23

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Stan sells a piece of land he used in his auto repair business at a gain of $9,000 in 2017.In addition,Stan sells equipment he purchased in 2012 for $8,000.He paid $20,000 for the equipment that had an adjusted basis of $12,000 when it was sold.He also sells some stock in 2017 at a loss of $11,000.No losses on the disposition of assets were recognized in prior years.The effect of these transactions on Stan's 2017 taxable income is:

All of the following are capital assets with the exception of

Ramona recognizes a $50,000 Section 1231 loss,a $30,000 Section 1231 gain,and ordinary income of $35,000 in 2017.Before 2017,Ramona's only Section 1231 transaction was a $15,000 loss reported in 2013.How should Ramona report her 2017 transactions?

Sidney,a single taxpayer,has taxable income of $45,000 from all sources except capital gains.He has a long-term capital gain of $1,000.What is the actual tax savings Sidney receives because of any special treatment of his $1,000 long-term capital gain?

"Recapture of depreciation" refers to:

Warren's 2017 adjusted gross income consists of the following items: ​ Warren's combined §1231 gains and losses recognized over the prior five tax years included a net loss of $10,000.The STCL carryover arose from a loss reported in 2012. What net amounts of ordinary income,LTCG income and STCG income will Warren's 2017 adjusted gross income consist of? (i.e.what amounts are reported after completing the netting process?) Ordinary Income LTCG STCG

Long-term capital gain classification is advantageous to taxpayers because of which of the following? I.Long-term capital gains are generally taxed at a lower rate than ordinary income. II.Part of a long-term capital game is excluded from income. ​

Allie,a well-known artist,gave one of her paintings to her nephew Alfred.When Alfred sells the painting he will have a capital gain.

In 2014,Jim had a $5,000 net Section 1231 gain.In 2016,Jim reported a Section 1231 loss of $12,000.In 2017,Jim has a $15,000 net Section 1231 gain.He had no other sales of property in 2017.What is Jim's ordinary income from his 2017 property transactions?

Hank realizes Section 1231 losses of $12,000 and Section 1231 gains of $7,000 during the current year.Hank's current-year adjusted gross income will increase (decrease) by what amount?

Classify the gain or loss on each of George's assets listed below using the following codes.Note: a code may be used once,more than once,or not at all. -George sells a fully depreciated air compressor that cost $975 for $650.The compressor was used to operate air tools.

Gabrielle has the following gains and losses for the current year: ​ What is Gabrielle's net capital gain or loss position for the year?

Victor bought 100 shares of stock of Wabash Manufacturing Corporation from an unrelated individual paying $1 per share on December 20,2016.On April 17,2017,the corporation is declared bankrupt and the shares are deemed worthless.What is the amount and character of Victor's recognized loss as a result of the bankruptcy?

Marilyn sells 200 shares of General Motors stock for $80 per share.She pays a $100 commission on the sale and has an adjusted basis of $8,000 on the stock. I.The amount realized from the sale is $15,900. II.Marilyn has a recognized gain of $8,000. ​

Discuss the general differences between Section 1245 and Section 1250 recapture provisions.

Section 1245 property is subject to a full recapture of all depreciation taken as ordinary income.

Classify the gain or loss on each of George's assets listed below using the following codes.Note: a code may be used once,more than once,or not at all. -George sells land purchased in 1989 that he used to park construction equipment at a gain of $16,500.

Dragonian Corporation sells a depreciable asset.Dragonian paid $50,000 for the asset.Accelerated depreciation on the asset is $12,000 up to the date of sale.Straight-line depreciation is $8,000.Determine the amount and character of the gain (loss)on the sale under each of the following assumptions: a.The asset is equipment.Dragonian deducted the maximum depreciation and the sales price is $44,000. b.The asset is an office building purchased in 1984.Dragonian deducted the maximum depreciation and the sales price is $54,000. c.The asset is an office building purchased in 2006.Dragonian deducted straight-line depreciation and the sales price is $54,000.