Question 1

Trista,a taxpayer in the 33% marginal tax bracket sold the following capital assets this year:
  What is the amount of and nature of (LT or ST)capital gain or loss? Be specific as to the rates at which gains,if any,are taxed.

Accepted Answer

The answer of Trista,a taxpayer in the 33% marginal tax...

Question 2

Niral is single and provides you with the following tax information for 2017:
  Compute her tax liability.[Show all calculations in good form.]

Accepted Answer

The answer of Niral is single and provides you with...

Question 3

Tina,whose marginal tax rate is 33%,has the following capital gains this year:
  What is the increase in income tax caused by these items (ignore the Medicare tax on net investment income)?

Accepted Answer

The answer of Tina,whose marginal tax rate is 33%,has the...

Question 4

Jade is a single taxpayer in the top tax bracket,with salary of $450,000 and investment income of $100,000.She is considering the sale of some shares of stock which will result in a $50,000 gain.She purchased the shares three years ago.Taking all taxes into account,how much tax will she pay due to this gain?

Accepted Answer

The answer of Jade is a single taxpayer in the...

Question 5

Chen had the following capital asset transactions during 2017:
  What is the adjusted net capital gain or loss and the related tax due to the above transactions,assuming Chen has a 25% marginal tax rate?

Accepted Answer

The answer of Chen had the following capital asset transactions...

Question 6

Corporate taxpayers may offset capital losses only against capital gains and may carry excess losses back three years and then forward five years.

Accepted Answer

Corporate taxpayers cannot deduct any net capital losses.Net capital losses can be carried back three years and forward five years.

Question 7

Amanda,whose tax rate is 33%,has NSTCL of $25,000,a $30,000 LTCG from sale of a rare coin held 15 months and a $18,000 LTCG from the sale of stock held for three years.By what amount will Amanda's tax liability increase?

Accepted Answer

B)The $25,000 NSTCL is offset against the $25,000 of the collectibles gain in the 28% group.Amanda's tax liability increases by $4,100 [($5,000 × .28)+ ($18,000 × .15)].

Question 8

During the current year,Nancy had the following transactions:  What is the amount of her capital loss deduction for the current year,and what is the amount and character of her capital loss carryover?

Accepted Answer

B)
 11ea7cb8_54a3_82c9_928c_03903ba8308d_TB1258_00 $3,000 is deductible currently-$400 of the STCL plus $2,600 of the LTCL.The remaining $5,400 of LTCL is carried over.

Question 9

Gertie has a NSTCL of $9,000 and a NLTCG of $5,500 during the current taxable year.After gains and losses are offset,Gertie reports

Accepted Answer

B)Offset $9,000 NSTCL against $5,500 NLTCG to yield $3,500 NSTCL.Deduct $3,000 currently with the remaining $500 carried over as STCL to next year.

Question 10

Max sold the following capital assets this year:
  What is the amount of and nature of (LT or ST)capital gain or loss?

Accepted Answer

The answer of Max sold the following capital assets this...

Question 11

In the current year,ABC Corporation had the following items of income,expense,gains,and losses:  What is taxable income for the year?

Accepted Answer

C)Corporations cannot offset net capital losses against ordinary income.($500,000 - $270,000 - $100,000 + $14,000 = $144,000).$6,000 of the loss offsets $6,000 of the gain.The remaining loss of $9,000 may be carried back three years and forward five years.

Question 12

Abra Corporation generated $100,000 of taxable income from operations this year and realized a $4,000 loss on the sale of Starbucks stock.Abra Corporation will pay taxes on $97,000 of taxable income.

Accepted Answer

Corporate taxpayers cannot deduct any net capital losses.Net capital losses can be carried back three years and forward five years.

Question 13

Topaz Corporation had the following income and expenses during the current year:  What is Topaz's taxable income?

Accepted Answer

B)$80,000 - 30,000 = $50,000.The $5,000 gain offsets $5,000 of the loss,leaving a $20,000 capital loss which can be carried back three years and forward five years.

Question 14

Mike sold the following shares of stock in 2017:
  What are the tax consequences of these transactions,assuming his marginal tax rate is (a)33% and (b)39.6%? Ignore the medicare tax on net investment income.

Accepted Answer

The answer of Mike sold the following shares of stock...

Question 15

Unlike an individual taxpayer,the corporate taxpayer does not utilize the 25% and 28% specialty capital gain rates,but it does apply the 15% tax rate to adjusted net capital gain.

Accepted Answer

None of the lower capital gain rates apply to corporate taxpayers.

Question 16

Kendrick,who has a 33% marginal tax rate,had the following results from transactions during the year:  After offsetting the STCL,what is (are)the resulting gain(s)?

Accepted Answer

A)The $4,000 STCL offsets the collectibles gain,reducing it to $16,000.

Question 17

Olivia,a single taxpayer,has AGI of $280,000 which includes $220,000 of salary and $60,000 of investment income.She will pay Medicare tax on the $60,000 of investment income of

Accepted Answer

B)The Medicare tax is 3.8% of the $60,000 net investment income.

Question 18

Maya expects to report about $2 million of AGI and $1.7 million of taxable income.Her AGI is composed of $1.25 million of salary,and the balance is investment income.Maya is thinking about selling some stock before year-end.She purchased the stock three years ago and expects to recognize a $500,000 gain.How much federal tax will she pay in total on the stock gain?

Accepted Answer

A)The gain will be subject to the 20% income tax rate on the LTCG and the 3.8% Medicare tax on investment income.$500,000 × 23.8% = $119,000.

Question 19

Melanie,a single taxpayer,has AGI of $220,000 which includes $160,000 of salary and $60,000 of investment income.She will pay Medicare tax on the $60,000 of investment income of

Accepted Answer

C)The Medicare tax is 3.8% of the lesser of the $60,000 net investment income or AGI in excess of the $200,000 threshold for a single taxpayer.3.8% × ($220,000 - $200,000)= $760.

Question 20

Candice owns a mutual fund that reinvests her dividends and capital gains earned during the year.The mutual fund reported to her that her share of earnings was: $500 in dividends,$1,500 in short-term net capital gains,and $1,300 in long-term net capital gains.She reported the items on her tax return and paid the appropriate tax on these earnings.If her basis in the fund was $25,000 at the beginning of the year,what is her basis at the end of the year?

Accepted Answer

D)
 11ea7cb8_54a3_a9db_928c_f3c49de202db_TB1258_00 Mutual fund earnings which are not distributed increase the basis in the fund.

Quiz 21: Property Transactions: Capital Gains and Losses

Trista,a taxpayer in the 33% marginal tax bracket sold the following capital assets this year: What is the amount of and nature of (LT or ST)capital gain or loss? Be specific as to the rates at which gains,if any,are taxed.

Niral is single and provides you with the following tax information for 2017: Compute her tax liability.[Show all calculations in good form.]

Tina,whose marginal tax rate is 33%,has the following capital gains this year: What is the increase in income tax caused by these items (ignore the Medicare tax on net investment income)?

Chen had the following capital asset transactions during 2017: What is the adjusted net capital gain or loss and the related tax due to the above transactions,assuming Chen has a 25% marginal tax rate?

Corporate taxpayers may offset capital losses only against capital gains and may carry excess losses back three years and then forward five years.

Amanda,whose tax rate is 33%,has NSTCL of $25,000,a $30,000 LTCG from sale of a rare coin held 15 months and a $18,000 LTCG from the sale of stock held for three years.By what amount will Amanda's tax liability increase?

During the current year,Nancy had the following transactions: What is the amount of her capital loss deduction for the current year,and what is the amount and character of her capital loss carryover?

Gertie has a NSTCL of $9,000 and a NLTCG of $5,500 during the current taxable year.After gains and losses are offset,Gertie reports

Max sold the following capital assets this year: What is the amount of and nature of (LT or ST)capital gain or loss?

In the current year,ABC Corporation had the following items of income,expense,gains,and losses: What is taxable income for the year?

Abra Corporation generated $100,000 of taxable income from operations this year and realized a $4,000 loss on the sale of Starbucks stock.Abra Corporation will pay taxes on $97,000 of taxable income.

Topaz Corporation had the following income and expenses during the current year: What is Topaz's taxable income?

Mike sold the following shares of stock in 2017: What are the tax consequences of these transactions,assuming his marginal tax rate is (a)33% and (b)39.6%? Ignore the medicare tax on net investment income.

Unlike an individual taxpayer,the corporate taxpayer does not utilize the 25% and 28% specialty capital gain rates,but it does apply the 15% tax rate to adjusted net capital gain.

Kendrick,who has a 33% marginal tax rate,had the following results from transactions during the year: After offsetting the STCL,what is (are) the resulting gain(s) ?

Olivia,a single taxpayer,has AGI of $280,000 which includes $220,000 of salary and $60,000 of investment income.She will pay Medicare tax on the $60,000 of investment income of

Melanie,a single taxpayer,has AGI of $220,000 which includes $160,000 of salary and $60,000 of investment income.She will pay Medicare tax on the $60,000 of investment income of