CH3_02_Capital Assets and Business Property

Question 1

1. If 100 shares of stock are purchased February 14, Year 1, what is the earliest date on which the stock can be sold and the gain or loss qualify for the long-term holding period?

A. August 14, Year 2.
B. February 15, Year 2.
C. February 14, Year 2.
D. August 15, Year 2.

Answer 1

B. February 15, Year 2.

초입불산입

Question 2

2. Bob sold securities in Year 1. The sales resulted in a capital loss of $7,000. He had no other capital transactions. He and his wife Gloria decide to file separate returns for Year 1. His taxable income was $26,000. What amount of capital loss can he deduct on his Year 1 return and what amount can he carry over to Year 2?

A. $7,000 in Year 1 and $0 carry over to Year 2.
B. $3,000 in Year 1 and $4,000 carry over to Year 2.
C. $4,000 in Year 1 and $3,000 carry over to Year 2.
D. $1,500 in Year 1 and $5,500 carry over to Year 2.

Answer 2

D. $1,500 in Year 1 and $5,500 carry over to Year 2.

Question 3

3. During Year 1, Mr. F acquired 100 shares of stock in ABC Corporation for $500. During Year 3, he sold the stock for $1,000. His adjusted basis in the stock at the time of sale was $500, and he had no other capital gains or losses during the year. What is the amount and character of income to be reported on F’s income tax return for Year 3?

A. $500 long-term capital gain.
B. $500 short-term capital gain.
C. $500 ordinary income.
D. $500 tax-exempt income.

Answer 3

A. $500 long-term capital gain.

Question 4

4. On January 2, Year 1, Bates Corp. purchased and placed into service 7-year MACRS tangible property costing $100,000. On December 31, Year 3, Bates sold the property for $102,000, after having taken $47,525 in MACRS depreciation deductions. What amount of the gain should Bates recapture as ordinary income?

A. $0
B. $2,000
C. $47,525
D. $49,525

Answer 4

7년 동산

full recapture
C. $47,525

Question 5

5. A taxpayer sold for $200,000 equipment that had an adjusted basis of $180,000. Through the date of the sale, the taxpayer had deducted $30,000 of depreciation. Of this amount, $17,000 was in excess of straight-line depreciation. What amount of gain would be recaptured under Section 1245, Gain from Dispositions of Certain Depreciable Property?

A. $13,000
B. $17,000
C. $20,000
D. $30,000

Answer 5

200,000
180,000
————
20,000

20,000까지만 가능 Gain 만큼
C. $20,000

Question 6

6. Mary Brown purchased an apartment building on January 1, 2008, for $200,000. The building was depreciated using the straight-line method. On December 31, 2017, the building was sold for $210,000 when the asset basis net of accumulated depreciation was $160,000. On her 2017 tax return, Brown should report

A. Section 1231 gain of $10,000 and ordinary income of $40,000.
B. Section 1231 gain of $40,000 and ordinary income of $10,000.
C. Ordinary income of $50,000.
D. Section 1231 gain of $50,000.

Answer 6

210,000
160,000 (200,000-40,000)
————-
50,000

D. Section 1231 gain of $50,000

Question 7

7. John owned a printing business and sold the following assets in Year 2:
Printing press:
Sales price $25,000
Original cost 20,000
Allowed or allowable depreciation 8,000
Computer equipment:
Sales price $30,000
Original cost 28,000
Allowed or allowable depreciation 14,000
John had a net Sec. 1231 loss of $6,000 in Year 1. What is the amount and character of John’s
gain for Year 2?

A. $14,000 ordinary income; $15,000 capital gain.
B. $22,000 ordinary income; $7,000 capital gain.
C. $28,000 ordinary income; $1,000 capital gain.
D. $0 ordinary income; $29,000 capital gain.

Answer 7

25,000
(20,000-8,000)
=13,000

30,000
(28,000-4,000)
=17,000

29,000 LTCG
-(8,000+13,000)

Question 8

8. The results of Digimatic Corporation’s first 3 years of operations are presented below:
Year Results of Operations
Year 1 Sec. 1231 losses of $10,000
Year 2 Sec. 1231 losses of $15,000
Year 3 Sec. 1231 gain of $75,000

Digimatic Corporation’s Year 3 Sec. 1231 gain can best be characterized as
A. A net long-term capital gain of $75,000.
B. A net long-term capital gain of $50,000.
C. A net long-term capital gain of $50,000 and ordinary income of $25,000.
D. A net long-term capital gain of $25,000 and ordinary income of $50,000

Answer 8

C. A net long-term capital gain of $50,000 and ordinary income of $25,000.

10,000+15,000 lookback

75,000-25,000
50,000 LTCG