REG Chapter 4

Question 1

Capital gains that are not taxed

Answer 1

HIDE IT:

• Homeowner’s exclusion (500K or 250K)
• Involuntary conversion
• Divorce property settlement
• Exchange of like-kind business/investment assets (tangible)
• Installment sale
• Treasury and Capital Stock Transactions (by corporation)

Question 2

Capital gain realized formula

Answer 2

Gain realized - adjusted basis of asset sold = gain or loss

Question 3

Basis in like-kind property received when boot is received

Answer 3

fair market value of like kind property received - deferred gain + deferred loss

Question 4

Non-deductible losses

Answer 4

WRAP:
-Wash sales
-Related party transactions
and
-Personal losses

Question 5

Distributable net income calculation

Answer 5

=Estate (trust) gross income - estate (trust) deductions + tax exempt interest - capital gains