Chapter14_HW_Solutions

# Chapter14_HW_Solutions - Accounting 322 Tax Module Chapter...

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Accounting 322 Tax Module Chapter 14 Homework Problems Complete each problem and show your work in a reasonably neat fashion. Put your name on each page and staple or clip your pages together. 1. Tyrone Corp, a calendar year C corporation, realized taxable income of \$36,000 from its regular business operations in Year 1. In addition, Tyrone had the following capital gains and losses: ST capital gain \$8,500 ST capital loss (\$4,000) LT capital gain \$1,500 LT capital loss (\$3,500) Tyrone did not realize any other capital gains and losses since starting operations. What is Tyrone’s total taxable income for Year 1? Nettting ST=8500-4000=4,500 gain Netting LT 1,500-3,500=2,000 loss Netting both 2,500 Other tax income 36,000+2,500=38,500 of total taxable income 2. Austin is a single taxpayer with Year 1 taxable income of \$100,000, exclusive of capital gains and losses. Austin had a net long term capital loss of \$8,000 in Year 1. What amount of capital loss can Austin offset against his ordinary income? Up to \$3,000 of losses can be deducted by an individual taxpayer in a year so \$3,000. 3. On January 2, Year 3, Tasha Corp purchased and placed into service 7-year MACRS tangible property costing \$100,000. On December 31, Year 5, Tasha sold the

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Chapter14_HW_Solutions - Accounting 322 Tax Module Chapter...

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