Nicole has the following transactions related to her investments and her sole proprietorship during 2014: 1) Stock that was purchased in 2009 is sold at a loss of $12,000. 2) Bonds that were purchased in 2014 are sold at a gain of $6,000. 3) A building used in her business is sold at a gain of $17,000. The building was purchased in 1996 and $24,000 of depreciation had been taken on the building. 4) Equipment purchased in 2009 is sold at a loss of $16,000. Depreciation of $25,000 had been taken prior to the sale. A delivery van is destroyed in an accident. Nicole realizes a gain of $5,000 on the van. 5) She had deducted $3,000 of depreciation on the van prior to the accident. She does not intend to replace the van.
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.

Question

Quizplus · Accepted Answer

The Answer of Nicole has the following transactions related to her investments and her sole proprietorship during 2014: 1) Stock that was purchased in 2009 is sold at a loss of $12,000. 2) Bonds that were purchased in 2014 are sold at a gain of $6,000. 3) A building used in her business is sold at a gain of $17,000. The building was purchased in 1996 and $24,000 of depreciation had been taken on the building. 4) Equipment purchased in 2009 is sold at a loss of $16,000. Depreciation of $25,000 had been taken prior to the sale. A delivery van is destroyed in an accident. Nicole realizes a gain of $5,000 on the van. 5) She had deducted $3,000 of depreciation on the van prior to the accident. She does not intend to replace the van.
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.

Nicole Has the Following Transactions Related to Her Investments and Her