FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 16: Property Transactions: Capital Gains and Losses

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 41

Multiple Choice

Review LaterAdd Note

Review Later

The 2011 "Qualified Dividends and Capital Gain Worksheet" is used:

A) To calculate the tax using the alternative tax method on 0%/15% net capital gain and qualified dividends.
B) To calculate the tax using the alternative tax method on 0%/15% net capital gain, but not on qualified dividends.
C) To calculate the tax using the alternative tax method on 0%/15% capital gain, 25% capital gain, and 28% capital gain, but not on qualified dividends.
D) To calculate the tax using the alternative tax method on 0%/15% capital gain, 25% capital gain, 28% capital gain, and qualified dividends.
E) None of the above.

F) A) and E)
G) C) and E)

Correct Answer

verified

Show Answer

Question 42

True/False

Review LaterAdd Note

Review Later

Lease cancellation payments received by a lessor are always ordinary income because they are considered to be in lieu of rental payments.

A) True
B) False

Correct Answer

verified

Show Answer

Question 43

Multiple Choice

Review LaterAdd Note

Virgil was leasing an apartment from Marple,Inc.Marple paid Virgil $1,000 to cancel his lease and move out so that Marple could demolish the building.As a result:

In 2012,Satesh has $5,000 short-term capital loss,$13,000 0%/15% long-term capital gain,and $7,000 qualified dividend income.Satesh is single and has other taxable income of $15,000.Which of the following statements is correct?

A net short-term capital loss first offsets any 28% net long-term capital gain before it offsets either 25% net long-term capital gain or 0%/15% net long-term capital gain.

The three tax statuses are:

A lease cancellation payment received by a lessee is generally treated as an exchange because the lease extinguished is usually a capital asset.

Which of the following events causes the purchaser of an option to add the cost of the option to the basis of the property to which the option relates?

An individual taxpayer received a valuable painting from his uncle,a famous painter.The painter did not create the painting,but had purchased it from another artist.After the taxpayer held the painting for two years,he sold it for a $400,000 gain.The gain is a long-term capital gain.

Larry was the holder of a patent on a video game.During 2012,he sold all substantial rights in the patent for $345,000 in cash and a 3% royalty on the purchaser's first $10,200,000 of sales each year related to the product in which the patent is incorporated.Larry had not reduced the patent to practice.He had a $56,000 basis for the patent.During 2012,he received $10,000 in royalties.What is the nature and amount of Larry's gain?

Willie is the owner of vacant land that he purchased in 2008 for $1,400,000 and held for investment.On January 22,2011,he was paid $145,000 for a thirteen-month option on the land by Susan.Susan could buy the land for an additional $1,200,000 by exercising the option.Susan had hoped to build a luxury home on the land,but was unable to get approval to build a big enough home to satisfy her needs.Consequently,Susan did not exercise her option and the option expired on February 22,2012.(1)What is Willie's basis,gain or loss,and type of gain or loss from these events? (2)What is Susan's basis,gain or loss,and type of gain or loss from these events?

In 2011,Jenny had a $12,000 net short-term capital loss and deducted $3,000 as a capital loss deduction.In 2012,Jenny has a $18,000 0%/15% long-term capital gain and no other capital gain or loss transactions.Which of the statements below is correct?

Ranja acquires $200,000 face value corporate bonds for $186,000 when the bonds are issued.He holds the bonds as an investment for two years and then sells them for $198,000.He amortizes $2,000 of the OID.What tax issues does Ranja have with respect to these bonds?

Original issue discount is amortized over the life of the bond.

In 2012,Mark has $18,000 short-term capital loss,$7,000 28% gain,and $6,000 0%/15% gain.Which of the statements below is correct?

Which of the following is correct concerning short sales of stock?