12 Chapter Problems 30,31,32,33,34,36,37,38,46,50,56,58,68
30)
c) because the accounts receivable where acquired in the ordinary course of a trade or business
d) it has business incentive
e) building is a depreciable property
f) cars are not property
h)
31)
In the first one Lois is selling a personal item, where she has all the rights and ownership, where as in the 2nd one she is selling a book owned by somebody else, so the book will be considered a capital asset and the sale will meet longterm holding period rules
32)
Byron will have a long term capital gain of $500,000; and the $50 per unit will also receive long term capital gain treatment regardless of how long the paten was held
33)
The $1,000 payments and the percentage of the monthly profits will be ordinary income to Cathy Crafts.
Dan may deduct the percentage payments as ordinary business expenses.
34)
November 17 2010 purchase
40,000
July 21 2011 exchange
42,000
The holding period for the truck begins on November 18 2010, and its basis 40,000. He will have a long term capital gain of 2,000
36)
Feb 23 2010 purchase
nov 15 2010 gift
april 19 2011 sale
10,000
12,000
13,000
a) short term gain because he held the stocks for less than a year
b) short term loss 1,500
37)
a)
STCG
STCL
LTCG
LTCL
1,500
-2,250
5,500
-2,500
-750
3,000
2,250 of overall gain taxed at a minimun rate of 15%
b)
STCG
STCL
LTCG
LTCL
6,000
-4,500
0
-750
1,500
-750
750 gain overall taxed at a minimum rate of 15%
c)
STCG
STCL
LTCG
LTCL
8,500
-4,000
-2,250
3,000
4,500
750
5,250 gain and tax rate of 15%
d)
LTCL
LTCG
STCG
STCL
750
-2250
900
-800
-1500
100
1,400 loss is deductable
e)
LTCG
LTCL
STCG
STCL
3,500
-3,000
2,000
-6,500
500
-4,500
4,000 loss is deductible
f)
LTCL
LTCG
STCL
STCG
-4250
250
-2500
500
-4000
-2000
6,000 loss is deductible
38)
AGI before CG&CL
longterm capital gain
LTCL
STCG
STCL
500,000
18,000
-4,000
6,000
-8,000
14,000
-2,000
a)
12,000 capital gain
b) 28%
c) 15%
46)
the 2,500 can be deducted as capital loss
the 12,000 on bonds are long term capital loss
40,000 capital loss on stock
a) total loss
b) AGI
54500
645500
50)
casualty gain(5months property
casualty loss(19 months)
casualty gain(21 months property)
section 1231 gain
section 1231 loss
LTCL
STCL
100
-200
500
750
-600
-4,000
-250
Initial AGI
add:
section 1231 gain
section 1231 loss
LTCL
STCL
less:
casualty loss(19 months)
casualty gain(5months property
casualty gain(21 months property)
30,000
AGI
25,500
56)
purchase of equipment
acc depreciation
basis
sale of equipment
100
-200
500
72,000
50,400
21,600
80,000
a) capital gain
b) capital loss/deductible
750
-600
-4,000
-250
58,400
-6,600
58)
a)
Jan 1 1975 purchase building
Jan 1 2011 sale of building
acc depre
1,000,000
1,250,000
962500
income
1,212,500
b)
68)
c, d