FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 8: Property Transactions: Capital Gains and Losses, section 1231, and Recapture Provisions

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 51

Multiple Choice

Review LaterAdd Note

Review Later

The possible holding periods for capital assets include:

A) Short-term = held 14 months or less.
B) Long-term = greater than six months.
C) Long-term = greater than 12 months.
D) Short-term = greater than 12 months.
E) None of the above.

F) C) and D)
G) All of the above

Correct Answer

verified

Show Answer

Question 52

Multiple Choice

Review LaterAdd Note

Review Later

In 2015,an individual taxpayer has $863,000 of taxable income that includes $48,000 of 0%/15%/20% long-term capital gain.Which of the following statements is correct?

A) All of the LTCG will be taxed at 0%.
B) All of the LTCG will be taxed at 15%.
C) All of the LTCG will be taxed at 20%.
D) Some of the LTCG will be taxed at 15% and some at 20%.
E) None of the above.

F) D) and E)
G) None of the above

Correct Answer

verified

Show Answer

Question 53

True/False

Review LaterAdd Note

The subdivision of real property into lots for resale when no substantial physical improvements have been made to the property never causes the gain from sale of the lots to be treated as ordinary income.

An individual taxpayer received a valuable painting from his uncle,a famous painter.The painter created the painting.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.

When an individual taxpayer has a net long-term capital gain that includes both 28% gain and 0%/15%/20% gain,which of these gains will be taxed first when the alternative tax on net long-term capital gain method is used and what difference does it make?

The tax law requires that capital gains and losses be separated from other types of gains and losses because there are limitations on the deduction of net capital losses.

Jambo invented a new flexible cover for a popular brand of cellphone,but did not have the finances to begin production of the cover.Instead,he sold all his rights to the invention (after patenting it)for $450,000 plus $.10 for each cover sold by the company that purchased the patent.Jambo had a zero tax basis for the invention.What is the character of his gain from disposition of the patent?

The maximum amount of the unrecaptured § 1250 gain (25% gain)is the depreciation taken on real property sold at a recognized gain.

All collectibles short-term gain is subject to a potential alternative tax rate of 28%.

To compute the holding period,start counting on the day after the property was acquired and include the day of disposition.

Depreciation recapture under § 1245 and § 1250 is reported on Form 4797.

Spencer has an investment in two parcels of vacant land.Parcel 1 is a capital asset and parcel 2 is a § 1231 asset.Spencer already has short-term capital loss for the year he would like to offset with capital gain.Spencer has § 1231 lookback loss that exceeds the gain from the disposition of either land parcel.Spencer only wants to sell one land parcel and each of them would yield the same amount of gain.The gain that would be recognized exceeds the short-term capital loss Spencer already has.Which of the statements below is correct?

When a patent is transferred,the most common forms of payment received by the transferor are a lump sum and/or periodic payment.

Short-term capital losses are netted against long-term capital gains and long-term capital losses are netted against short-term capital gains.

Section 1231 property generally does not include accounts receivables arising in the ordinary course of business.

If a capital asset is sold at a gain,the holding period is important.

A business machine purchased April 10,2013,for $98,000 was fully depreciated in 2013 using § 179 immediate expensing.On August 15,2015,the machine was sold for $67,000.What is the amount and nature of the gain or loss from disposition of the machine?

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%/20% net long-term capital gain.

A franchisor licenses its mode of business operation to a franchisee.

Short-term capital gain is eligible for a special tax rate only when it exceeds long-term capital gain.