lecture - Week 10 chapter 14 1 In the previous lesson we...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Week 10 chapter 14 1. In the previous lesson we discussed Property Transactions: Determination of Gain, Loss, Basis Considerations, and Nontaxable Exchanges. In this lesson we will discuss Property Transactions: Capital Gains and Losses, Section twelve thirty one, and Recapture Provisions. 2. Recognized gains and losses must be properly classified. Proper classification depends upon three characteristics: The tax status of the property. The manner of the property's disposition. And the holding period of the property. The three possible tax statuses are capital asset, section twelve thirty one asset, or ordinary asset. Property disposition may be by sale, exchange, casualty, theft, or condemnation. There are two possible holding periods: short term and long term. The short- term holding period is one year or less. The long-term holding period is more than one year. The major focus of this lesson is capital gains and losses. Capital gains and losses usually result from the disposition of a capital asset. The most common disposition is a sale of the asset. Capital gains and losses can also result from the disposition of section twelve thirty one assets, which is discussed later in this lesson. 3. After completing this lesson, you should be able to: Understand the rationale for separate reporting of capital gains or losses; Distinguish capital assets from ordinary assets; Understand the relevance of a sale or exchange to classification as a capital gain or loss and apply the special rules for the capital gain or loss treatment of the retirement of corporate obligations, options, patents, franchises, and lease cancellation payments; Determine whether the holding period for a capital asset is long term or short term; And describe the beneficial tax treatment for capital gains and the detrimental tax treatment for capital losses for noncorporate taxpayers 4. After completing this lesson, you should also be able to: Describe the tax treatment for capital gains and the detrimental tax treatment for capital losses for corporate taxpayers; Understand the rationale for and the nature and treatment of gains and losses from the disposition of business assets; Distinguish section twelve thirty one assets from ordinary assets and capital assets and calculate the gain or loss; Determine when section twelve forty five recapture applies and how it is computed; And determine when section twelve fifty recapture applies and how it is computed. 5. After completing this lesson, you should also be able to: Understand considerations common to sections twelve forty five and twelve fifty; Apply the special recapture provisions for related parties and IDC and be aware of the special recapture provision for corporations; Describe and apply the reporting procedures for sections twelve thirty one, twelve forty five, and twelve fifty; And identify tax planning opportunities arising from the sale or exchange of capital assets and avoid pitfalls associated with the recapture provisions. 6.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 02/08/2010 for the course ACC317 adv. feder taught by Professor Man during the Spring '10 term at Strayer.

Page1 / 5

lecture - Week 10 chapter 14 1 In the previous lesson we...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online