answer

watching

views

26 Mar 2018

Review this article which looks at long-term and short-term capital gains. http://taxes.about.com/video/What-Are-Long-Term-and-Short-Term-Capital-Gains-Tax-Rates-.htm

Identify capital assets that exist in your current, past or future job. How does the tax treatment differ on a long-term versus short-term capital gain? What is the tax treatment of net capital losses, including any unused capital losses in a particular year?

answer

watching

views

For unlimited access to Homework Help, a Homework+ subscription is required.

You have 0 free answers left.
Get unlimited access to 3.8 million step-by-step answers.

Get unlimited access

Already have an account? Log in

Nelly StrackeLv2

27 Mar 2018

Unlock all answers

Get 1 free homework help answer.

Already have an account? Log in

Related questions

Multiple Choice:

_____For purposes of calculating depreciation on the taxpayersbusiness usage of his home, the depreciable basis of the officeis:

The allocable share (example - square footage) of the adjustedbasis of the home when he converted the room from personal space toan office for business use.

The allocable share of the fair market value of the home at thetime he converted the room to an office space for business.

The lesser of a. or b.

The greater of a. or b.

____ Which of the following is not included inthe taxpayerâs basis of business property?

Sales taxes paid with the purchase

Title insurance paid with the purchase

Amounts paid to have the property installed

Amounts paid to have the property delivered

All of the above are included in the taxpayerâs basis.

____ A taxpayer has a net short term capital lossof $2,000 and a net long term capital loss of $3,000 for the taxyear. If there are no other gains or losses, what, if anything,carries over to the next year?

$2,000 short term capital loss

$2,000 long term capital loss

$2,000 short term capital loss; $3,000 long term capitalloss

$500 short term capital loss; $1,500 long term capital loss

The taxpayer has no capital loss carryover.

_____ A taxpayer purchased a capital asset on March 22, 2015.What is the earliest date that he can dispose of the asset wherethe sale qualifies for long term capital gains/loss treatment?

September 22, 2015

September 23, 2015

March 22, 2016

March 23, 2016

_____ A married couple sells the following capital assets duringthe year:

Date Acquired	Date Sold	Sales Price	Adjusted Basis

The coupleâs net capital gain is:

$4,000

$12,000

$5,000

$11,000

None of the above

_____ Land purchased for $80,000 in 2000 and used in thetaxpayers business is sold in 2015 for $87,000. The sale of theland results in:

$7,000 short term capital gain

$7,000 long term capital gain

$7,000 ordinary income

$7,000 section 1231 gain

None of the above

_____ Taxpayer purchased office equipment for $9,000. Theequipment had been depreciated $5,000. It was sold for $7,500. Whatis the amount and nature of the gain/loss from the sale?

$1,500 ordinary loss

$1,500 capital loss

$3,500 ordinary income

$3,500 long term capital gain.

_____ Taxpayer has a plant where she acquired a machine for$14,000. Over time depreciation of $6,000 was claimed. In thecurrent year taxpayer sells the asset for $19,000. What is theamount and nature of the gain/loss from the sale?

$6,000 of ordinary income, $5,000 long term capital gain

$5,000 of long term capital gain, $5,000 of ordinary income

$11,000 ordinary income.

$11,000 long term capital gain

______ Equipment used in the business is purchased in 2012 for$50,000. It was sold in 2015 for $22,000.

Depreciation information is as follows:

Accelerated depreciation claimed $23,758

Straight line Depreciation would have been$21,500

What is the gain or loss on the sale of the equipment, and howwill it be treated for tax purposes?

$4,242 Section 1231 loss

$1,758 Section 1231 loss

$2,258 ordinary loss; $1,984 Section 1231 loss

$4,242 ordinary loss

$6,500 ordinary loss

_____ In Malat v Riddell, 383 U.S. 569, 86 S.Ct. 1030,which of the following statements is accurate:

The Supreme Court sustained the governmentâs position, holdingthat the property was held by the taxpayer primarily for sale tocustomers in the ordinary course of his trade or business.

The Supreme Court held that the sale of âproperty held by thetaxpayer primarily for sale to customers in the ordinary course ofa trade or business is synonymous with the wordâsubstantiallyâ.

Words of the statutes should be interpreted where possible intheir ordinary, everyday senses. The Supreme Court concluded thatas used in Section 122191), âprimarilyâ means âof first importanceâor âprincipallyâ.

In so concluding as it did, the Supreme Court found itunnecessary to remand the case back to the lower court.

John (a sole proprietor) and Eagle Corporation (a C corporation)each recognize a long-term capital gain of $10,000 and a short-termcapital loss of $18,000 on the sale of capital assets. Neithertaxpayer had any other property transactions during the year.

a. Regarding John's gains and losses, labeleach of the following as "True" a tax consequence or "False" not atax consequence.

1. John reports the capital transactions on his individual taxreturn and deducts a $18,000 net capital loss in the currentyear.

2. John reports the capital transactions on his individual taxreturn but is limited to a $3,000 net capital loss deduction in thecurrent year.

3. John nets the $10,000 LTCG against the $18,000 STCL.

Regarding Eagle Corporation's gains and losses, label each ofthe following as "True" a tax consequence or "False" not a taxconsequence.

Eagle Corporation nets the $10,000 LTCG against the $18,000STCL, resulting in a $8,000 net capital loss.

Eagle is limited to a $8,000 net capital loss deduction in thecurrent year.

3. All of the $18,000 net capital loss is deductible in thecurrent year.

4. Eagle carries back a $8,000 STCL 3 years and, if necessary,forward 5 years, to be offset against capital gains in suchyears.

pinkrabbit444

1. In the current year, Norris Corporation, has a $50,000 ofordinary business income, and a Net Long Term Capital Loss (NLTCL)of $4,800. Norris had no previous capital gains or losses. How muchof the capital loss may Norris Corporation deduct in the currentyear?

a. $0

b. $3,000

c. $4,800

d. None of the above [Answer: _______]

2. Blue Devil LLC purchased a rental house and land during thecurrent year for $150,000. The purchase price was allocated asfollows: $100,000 to the building and $50,000 to the land. Theproperty was placed in service on May 22. Calculate Blue Devilâsmaximum depreciation for this first year:

a. $1,605

b. $2,273

c. $2,408

d. $3,410

e. None of these [Answer: _______]

3. The most significant impact that the new Tax Cuts and Job Actof 2017 will have on corporations in the future is most likely:

a. A reduction in the number of corporations that may be createddue to increased tax complexity

b. An increase in the income tax liability of mostcorporations

c. A decrease in the income tax liability of mostcorporations

d. An increased likelihood of corporate bankruptcies.

e. None of these. [Answer: _______]

4. Sarah invested $50,000 in the ABC Limited Partnership in 2018and received a 10 percent interest in the partnership. She is alimited partner and has no management responsibilities. During2018, ABC LP generated a $90,000 profit and she withdrew $5,000from the partnership. What is Sarahâs tax basis in ABC LP at theend of 2018?

a. $45,000

b. $50,000

c. $54,000

d. $59,000

e. None of these. [Answer: _______]