Question 1

Bill is in the 28 percent tax bracket in 2017. During the year, he sold some stock held for 11 months at a $500 gain, gold coins held for two years at a $1,900 loss, antique toys held three years at a $2,200 gain, bonds held for two years for $400 gain, and some investment land held six months at a $300 loss. Determine Bill's net capital gain or loss and detail how it will be treated for tax purposes.

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Question 2

What is Section 291 recapture?

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Question 3

Vanessa bought 2,000 shares of Glenco stock when the company was first formed for $57,000. The company had $900,000 of total capital when formed and the stock qualified as Section 1244 stock. Vanessa sold the stock three years later for $3,000. If Vanessa is single, how much gain or loss does she have on the sale of the stock and how will it be treated by her?

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Question 4

Determine the amount and type of capital loss deduction and carryover to the next year in each case below for Gina, a single taxpayer.
STCG STCL LTCG LTCL
a. 0 $2,600 0 $2,800
b. $500 $ 300 $ 200 $2,300
c. 0 $3,500 $1,800 $1,600

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Question 5

150 shares of Data stock bought for $15,000 on April 1 of year 2 and sold for $17,000 on May 28 of year 4.
a. If the taxpayer is a corporation with taxable income of $100,000 before these three property transactions, what is the corporation's total taxable income?
b. If the taxpayer is an individual in the 15 percent tax bracket before the three property transactions, what tax rate(s) will apply to the sale of gain assets?
c. How would your answer change if the taxpayer is in the 33 percent tax bracket?

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Question 6

What is the difference between a realized gain or loss and a recognized gain or loss?

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Question 7

What is depreciation recapture?

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Question 8

When does an asset have a substituted basis?

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Question 9

How are individual and corporate net capital losses treated?

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Question 10

What are three types of dispositions other than a sale? Briefly explain each.

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Question 11

What is the effect of the Section 1231 look-back rules?

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Question 12

Janeway Corporation has ordinary taxable income of $127,000 in 2017 before consideration of any of the following property transactions. It sold two blocks of stocks held for investment: one yielded a short-term capital gain of $8,000 and the other a long-term capital loss of $14,000. In addition, it sold four pieces of machinery used for three years for $30,000. The machines had cost $50,000 originally and had $35,000 of depreciation deductions taken. They also sold a building for $400,000 that they had purchased in 2000 for $390,000. The depreciation deductions up to the date of sale were $89,000. Determine the amount and type of the net gains and losses from the property transactions and Janeway Corporation's taxable income for 2017.

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Question 13

Barbara, a single woman with a 25 percent marginal tax rate, sold two assets during 2017:
Sale 1. On February 25 she sold 200 shares of Veebee stock for $19,000. She had purchased the stock for $16,000 on February 23, 2016.
Sale 2. On July 20 she sold an antique automobile for $30,000. She had purchased the automobile for $31,000 on July 21, 2016.
a. How much and what kind of gain or loss does she have from each sale?
b. What tax rate(s) would apply to the net gain?

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Question 14

What did Congress do to close the loophole that allowed a person to exclude the gain on a primary personal residence and then later claim the exclusion on a vacation home that was owned at the same time as the primary residence?

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Question 15

Nancy sold her Section 1202 stock for $9,000,000 on August 7, 2017. She had purchased the stock nine years ago for $1,500,000. She invested $4,500,000 in other qualifying Section 1202 stock. How will Nancy treat the gain on this sale for tax purposes?

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Question 16

In what order are capital gains subject to the 15%/20%, 25%, and 28% capital gains included in taxable income in the determination of the tax liability?

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Question 17

What are the basic long-term capital gain tax rates and to which asset gains do they apply?

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Question 18

Why is the character of a gain or loss on a disposition important? What are the three types of recognized gains or losses that determine their taxation?

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Question 19

In what order are capital gains subject to the 15%/20%, 25%, and 28% capital gains tax rates included in taxable income in the determination of the tax liability?

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