Tab sells Swan Co stock with a n adjusted basis of $3000 for $5000. What is the gain or loss
The realized gain is $2000
Tab sells Swan Co stock with an adjusted basis of $3000 for and sold the stock for $2000.
Realized loss of $1000
Lori owns Tan co stock that costs $3000. The stock has appreciated in value by $2,000 since Lori purchased it. Do you realize a gain or not?
No, there is no realized gain because fluctuation in value is not a disposition or an identifiable event for tax purposes
Lori owns Tan co stock that costs $3000. The stock has declined in value by $2,000 since Lori purchased it.
No, there is no realized loss because fluctuation in value is not a disposition or an identifiable event for tax purposes
Barry sells property on which there is a mortgage of $20,000 to Cole for $50,000 cash. What amount is realized?
The amount realized is $70,000. Cole assumes the mortgage
An insured truck that Marvin use din his trade or business is destroyed in an accident the adjusted basis is $8000 and the fair market value is $6,500. Marvin receives insurance proceeds of $6,500.
$1,500 loss (6,500 less 8,000). Adjusted basis is reduced by 1,500 casualty loss and $6500 insurance proceeds received.
An insured truck that Marvin used in his trade or business is destroyed by accident. The adjusted basis is $6500, and the fair market value is $8000. Marvin receives insurance proceeds of $8000.
1,500 gain (8,000 less 6,500). The adjusted basis is increased by the $1,500 casualty gain and is reduced by the $8,000 proceeds received. Adjusted basis = 6500 +1500 - 8000 = 0 adjusted basis
Antonio purchases Eagle co taxable bonds with a face value of $100,000 for $110,000, thus paying a premium of $10,000. he annual interest rate is 7%, and he bonds mature 10 years from he date of purchase. What is the annual interest income? What happens i
7000 (.07*100,000, rate times principle); The $10,000 bond premium is deducted over 10 years; Reduced each year by the amount of the amortization deduction; Amortization of he bond premium and the basis adjustment would be mandatory, but no deduction woul
Assume Alice sells the car which she has held exclusively for personal use, for $23,000. Gain or loss
Realized and recognized gain of $1,000.
Assume Alice sells the car which she has held exclusively for personal use, for $20,000. Gain or loss
Realized loss of $2,000 but not recognized (14-7)
Wade buys land from his employer for $10,000 on Dec 30. The fair market value of the land is $15,000.
Wade must include the $5000 difference between the cost and the fair market value of the land in gross income for the taxable year. the bargain element represents additional compensation for Wade His basis for the land is $15,000 the land's fair market va
Polly purchases 100 shares of Olive Co stock on July 1, 2011, for $5,000 and another 100 shares of Olive stock on July 1 , 2012, for $6,000. she sells 50 shares of the stock on Jan 2, 2013. What is the cost of the stock
1. 5000/100 = $50 per share
2. 6000/100 - $60 per share
3. Take the first price of the lot. 50 shares *50 a share = $2,500. This is the cost that Poly will compare with the amount realized in determining the gain or loss from the sale.
Harry purchases a building and land for $800,000. Because of the depressed nature of the industry in which the seller was operating. Harry was able to negotiate a very favorable purchase price. Appraisals of the individual assets indicate that the fair ma
Harry's basis for the building is $480,000= ( (600,000/1,000,000)
800,000); for the land $320,000 =((400,000/1,000,000)
800,000)
Rocky sells his business to Paul. They agree that the values of the individual assets are as follows:
Inventory $50,000
Building 500,000
Land 200,000
Goodwill 150,000
After negotiations, Rocky and Paul agree on a sales price of $1 million. Applying the re
1. Inventory $50,000
Building 500,000
Land 200,000
Goodwill 250,000 = (900,000 - 1,000,000 = 100,000 +150,000)
Rocky sells his business to Paul. They agree that the values of the individual assets are as follows:
Inventory $50,000
Building 500,000
Land 200,000
Goodwill 150,000
After negotiations, Rocky and Paul agree on a sales price of $1 million. Without the res
Could allocate the excess pro rata to all of the assets including goodwill, based on their respective fair market values.
Inventory: 55,556
Building: 555,556
Land: 222,222
Goodwill: 166,667 (150000/900000 * 1000000)
Susan owns 100 shares of Sparrow Co common stock for which she paid $1,100. She receives a 10% common stock dividend, giving her a new total of 110 shares. What is her basis before the stock dividend and after.
1. 11 per share (1,100 / 100)
2. 10 per share (1,110/110)
Fran owns 100 shares of Cardinal Co. common stock for which she paid $1000. She receives a nontaxable stock dividend of 50 shares of preferred stock on her common stock. he fair market values on the date of distribution of the preferred stock dividend are
FMV of common (30 X 100 shares) $3000
FMV of preferred ($40 X 50 shares) 2,000
Total: 5,000
Basis of common 3/5 x 1000 600
Basis of preferred 2/5 x 1000 400
The basis per share for he common stock is $6 (600/100 shares) . The basis per share for the prefe
Donald receives nontaxable stock rights with a fair market value of $1000. the fair market value of the stock on which the rights were received is $8000 (cost 10,000). Donald does not elect to allocate.
1,000/8,000 = 13% < 15% which means they do not have to elect.Donald didn't elect so his basis rights is zero. If he exercises the right the basis of the new stock is the exercise (subscription price).
Donald receives nontaxable stock rights with a fair market value of $3000. the fair market value of the stock on which the rights were received is $8000 (cost 10,000). Donald does elect.
3,000/8,000 = 38% > 15% thus he is required to allocate.
The basis of the stock is $7,273 (8,000/11,000 * 10,000)
The basis of the rights is $2,727 (3,000/11,000 * 10,000)
If donald exercises the rights the basis of the new stock is the exercise (subscrip
Melissa purchased stock in 2012 for $10,000. She gave the stock to her son, Joe, in 2013, when the fair market value was $15,000. No gift tax is paid on the transfer and Joe subsequently sells the property for $15,000. What is Joe's basis and loss or gain
Joe's basis is 10,000.
Realized gain of 5,000 (15,000 (sold) - 10,000 (mom's cost))
Burt purchased stock in 2012 for $10,000. He gave the stock to his son, cliff, in 2013, when the fair market value was $7,000. no gift tax is paid on the transfer. cliff later sells the stock for $6,000. What is cliff's basis, and gain or loss?
Basis is $7,000. (FMV is less than the doner's payment)
Realized loss from the sale of 1,000 (6000-7000).
Burt purchased stock in 2012 for $10,000. He gave the stock to his son, cliff, in 2013, when the fair market value was $7,000. no gift tax is paid on the transfer. cliff later sells the stock for $8,000. What is cliff's basis, and gain or loss?
Loss of 2,000 (8000-10000)
Application of the loss-basis rule produces a gain of 1,000 (8,000 - 7,000). because the amount realized is between the gain basis and the loss basis, cliff recognizes neither as a gain or loss.
In 2013, Bonnie made a gift of stock (adjusted basis of 15,000) to Peggy. The stock had a fair market value of $50,000, and the transfer resulted in a gift tax of $4,000. What is the unrealized appreciation of the stock? Taxable gift? And Peggy's basis?
35,000 (50,000-15,000); 36,000 (50,000-14,000 annual exclusion); 18,880:
Donor's adjusted Basis 15,000
Gift tax attributable to appreciation (35,000/36,000) =.97
rounded X 4,000 3,880
Donee's Gain Basis 18,880
Don made a gift of stock to Matt in 2013, when the fair market value of the stock was $50,000. Don paid a gift tax of $4,000. Don had purchased the stock in 1993 for $65,000.
There is no realized appreciation at the date of the gift, none of the gift tax paid is added to Don's basis in calculating Matt's gain basis. Therefore, Matt's gain basis is $65,000.
Jill acquired 100 shares of Wren Co stock on Dec 30, 1995, for $40,000. on Jan 3, 2013, when the stock has a fair market value of $38,000, Jill gives it to Dennis and pays gift tax of $4,000. the basis is not increased by a portion of the gift tax paid be
Gain basis is 40,000; Basis for determining loss is 38,000 because the fair market value on the date of the gift is less than the donor's adjusted basis;
Jill acquired 100 shares of Wren Co stock on Dec 30, 1995, for $40,000. on Jan 3, 2013, when the stock has a fair market value of $38,000, Jill gives it to Dennis and pays gift tax of $4,000. the basis is not increased by a portion of the gift tax paid be
He has a recognized gain of $5,000. The holding period for determining whether the capital gain is short-term or long-term begins on Dec 30, 1995, the date Jill acquired the property.
Jill acquired 100 shares of Wren Co stock on Dec 30, 1995, for $40,000. on Jan 3, 2013, when the stock has a fair market value of $38,000, Jill gives it to Dennis and pays gift tax of $4,000. the basis is not increased by a portion of the gift tax paid be
He has a recognized loss of $2,000. The holding period for determining whether the capital loss is short-term or long-term begins on January 3, 2013, the date of the gift.
Jill acquired 100 shares of Wren Co stock on Dec 30, 1995, for $40,000. on Jan 3, 2013, when the stock has a fair market value of $38,000, Jill gives it to Dennis and pays gift tax of $4,000. the basis is not increased by a portion of the gift tax paid be
There is no loss because the amount realized is less than the gain basis of $40,000 and more than the loss basis of $38,000.
Vito gave a machine to Tina in 2013. At the time the adjusted basis was $32,000 (cost of 40,000 less accumulated deprecation of 8,000) and the fair market value was 26,000. No gift tax was paid.
Tina's gain basis at the date of gift is 32,000; and her loss basis is 26,000 during 2013; Tina deduct depreciation (cost recovery) of 6,400 (32,000
.2)
Refer to chapter 8 tables* At the end of 2013, Tina's gain basis and loss basis are calculated as foll
Alice and various other family members inherited property from Alice's mother, who died in 2012. A tthe date of death, the mother's adjusted basis for the property Alice inherited - her mother's house was $275,000. The house's fair market value at the dat
Alice's basis for income tax purposes is $475,000. this is commonly referred to as a stepped-up-basis.
Alice and various other family members inherited property from Alice's mother, who died in 2012. A tthe date of death, the mother's adjusted basis for the property Alice inherited - her mother's house was $275,000. The house's fair market value at the dat
Alice's basis for income tax purposes is $260,000. This is commonly referred to as stepped-down-basis
Nancy inherited all of the property of her father, who died in 2013. Her father's adjusted basis for the property at the date of death was $650,000. The property's fair market value was $3,750,000 at the date of death and $3,760,000 six months after death
The alternative valuation date cannot be elected because the vale of the value of the gross estate has increased during the six-month period. Nancy's basis for income tax purposes is $3,750,000.
Nancy inherited all of the property of her father, who died in 2013. Her father's adjusted basis for the property at the date of death was $650,000. The property's fair market value was $3,750,000 at the date of death and $3,745,000 six months after death
The basis for income tax purposes is 3,745,000.
Nancy inherited all of the property of her father, who died in 2013. Her father's adjusted basis for the property at the date of death was $650,000. The property's fair market value was $3,750,000 at the date of death and $3,760,000 six months after death
Because the executor elected the alternate valuation date, Nancy's basis from income tax purposes is 3,747,000.
Ned gives stock to his uncle, Varn, in 2013. Ned's basis for the stock is $100,000 and the fair market value is $900,000. No gift tax is paid. Eight months later, Ned inherits the stock from Vern. At the date of Vern's death, the fair market value of the
Ned's adjusted basis for the stock is 100,000.
Floyd and Vera are married and reside in a community property state. They own as community property 200 shares of Cros stock acquired in 1988 for $100,000. Floyd dies in 2013, when the securities are valued at $300,000. One-half of the crow stock is inclu
The basis for determining gain or loss is $300,000, determined as follows:
Vera's one-half of the community property (stepped up from
50,000 to 150,000 due to Floyd's death) 150,000
Floyd's one-half of the community property (stepped up from
$50,000 to 15
Floyd and Vera are jointly held and reside in a common law state. They own as community property 200 shares of Cros stock acquired in 1988 for $100,000. Floyd purchased the property and made a gift of one-half of the property to Vera when the stock was ac
Vera's basis for determining gain or loss in the excluded half is not adjusted upward for the increase in value to date of death.; Therefore, Vera's basis is $200,000, determined as follows:
Vera's one-half of the jointly held property (carryover
basis of
Pedro sells business property with an adjusted basis of $50,000 to his daughter, Josefina, for its fair market value of $40,000. Pedro's realized loss of $10,000 is not recognized. How much does Josefina recognize if she sells the property for $52,000.
Josefina recognizes a $2,000 gain. Her realized gain is 12,000 (52,000 less her basis of $40,000) but she can offset Pedro's $10,000 loss against the gain.
Pedro sells business property with an adjusted basis of $50,000 to his daughter, Josefina, for its fair market value of $40,000. Pedro's realized loss of $10,000 is not recognized. How much gain does Josefina recognize if she sells the property for $48,00
Josefina recognizes no gain or loss. her realized gain is $8000 (48,000 less 40,000) but she can offset $8,000 of Pedro's 10,000 loss against the gain. not that Pedro's loss can only offset Josefina's gain. It cannot create a loss for Josefina.
Pedro sells business property with an adjusted basis of $50,000 to his daughter, Josefina, for its fair market value of $40,000. Pedro's realized loss of $10,000 is not recognized. How much loss does Josefina recognize if she sells the property for $38,00
Josefina recognizes a $2,000 loss, the same as her realized loss (38,000 less 40,000 basis) Pedro's loss does not increase Josefina's loss. his loss ca be offset only against a gain. Because Josefina has no realized gain. because Josefina has no realized
Alice owned 100 shares of green co stock (adjusted basis of 20,000) She sold 50 shares for 8,000. Ten days later, she purchased 50 shares of the same stock for $7,000.
Realized loss is 2000 (8000 amount realized - 10,000 adjusted basis of 50 shares) is not recognized because it resulted form a wash sale. Alice's basis in the newly acquired stock is 9000 (7000 purchase price + 2000 unrecognized loss form the wash sale).
Diane's personal residence has an adjusted basis of $175,000 and a fair market value of $160,000. Diane coverts the personal residence to rental property.
Her basis for loss is $160,000 ( lower of 175,000 adjusted basis and fair market value of $160,000). The $15000 decline in value is a personal loss and can never be recognized for tax purposes. diane's basis for gain is 175,000