Tax 610Solutions for Chapter 12Fall 2014Professor Maria Pirrone
#30a, b d and g are capital assets.
#35The basis for loss for Susan is the fmv on January 8, 2014, which is less than the basis to the donor. If the fmv is used as the basis, the holding period begins on the day following the date of the gift . $900 stcl ($1,500 - $2,400)
#37aa.) Net short term capital loss$750($1,500-$2,250) ANDa Net long-term capital gain of $3,000 ($5,500 - $2,500) The Net Capital Gain is $2,250 ($3,000 - $750) which is taxed at a maximum rate of 15/20 percent.
#37bThere is a net amount of $750 included in Ed’s adjusted gross income. Ed has a net short term capital gain of $1,500 ($6,000 - $4,500) and a net long-term capital loss of $750. The net overall capital gain is $750 ($1,500 - $750) which is taxed as an ordinary income up to a maximum rate of 39.6 percent.
#37c•Ed has a net long-term capital gain of $4,500 ($8,500 - $4,000) and a net short-term capital gain of $750 ($3,000-$2,250). The $4,500 is taxed up to a maximum of 15/20 percent , and the $750 is taxed as ordinary income.
#37d•d) The net amount deducted from Ed’s adjusted gross income is $1,400.