421 chapter 14 in-class problems-completed

421 chapter 14 in-class problems-completed - 29 290,000...

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Unformatted text preview: 29 290,000 (17,400) 272,600 (198,500) 74,100 Sales price less selling expenses Adjusted selling price less adjusted basis when sold Realized gain 36 a b c d e f 39 a b 50000 gain on the sale of a personal use asset is recognized for incom 50000 loss on the sale of a personal residence is not recognized for in 10,000 condemnation loss on his personal residence is not rec Unrealized gains and losses are not recognized for income tax purpo 23,000 insurance recovery (22,000) less adjusted basis when lost 1,000 realized and recognized gain for income tax purposes. Jerry's realized loss of $450 is not recognized for income tax purpose Zero, there have not been any stock sales through 7-1-2007. 12/03/07 180 MDG @ $70 180 1/1/07 purchase $75 Realized & recognized loss C 08/01/08 90 grU @ $330 90 6/1/07 PURCHASE $300 Realized & recognized gain d 01/01/09 150 MDG @ $90 120 1/1/07 purchase $75 30 11/1/07 purchase $70 Realized & recognized gain 2/1/09 75 GRU @ $500 60 6/1/07 PURCHASE $300 15 3/1/08 PURCHASE $375 42 a b 3,000 taxable cash dividend 110,000 FMV of the common stock on the date of distribution 2,000 FMV of the preferred stock shares received on the date 112,000 Combined FMV 110,000 x 112,000 2,000 x 112,000 100,000 100,000 1,000 shares of common prior to the stock dividend 50 shares of common received as stock dividend 1,050 new total shares of common stock after the stock divide 98,214 basis in common shares when stock dividend received 1,050 new total shares of common stock 43 a 1,000 FMV of stock rights received 6,000 FMV of the stock held 1,000 FMV rights 6,000 FMV stock 7,000 FMV combined b c 714 1,200 (714) 486 486 sales price of rights less basis realized gain recognized gain d No gain or loss is recognized upon expiration of stock rights, any alloc "snaps back" onto the stock the basis came from when allocated. e 750 FMV of stock rights received 6,000 FMV of the stock held 47 a Donor's basis 1,120,000 FMV at date of gift (825,000) donor's basis in gift 295,000 Appreciation in the hands of the donor Appreciation in the hands of the donor FMV at date of gift-annual per donee exclusion amount 295,000 1,120,000-13,000 = Donor's basis gift tax paid attributable to appreciation in the hands of the donor Natalie's (donee) basis b If the donee disposes of the asset at a gain, then the donee's basis is disposes of the asset at aloss, then the donee's basis is the FMV of th if the donee disposes of the asset at a price that falls between the don the date of gift, no gain or loss is recognized upon disposition by the d Cash Stock building land 50 53 a 3,000 sales price of car (7,000) less adjusted basis when sold (4,000) realized loss - recognized loss Amy, her sister, is a related party, therefore,no loss recognized by Jes 5,500 sales price of car b (3,000) (2,000) 500 (500) - less basis less additional costs realized gain use a portion of Jessie's disallowed loss recognized gain 56 a 3,600 sales price (4,000) basis in 400 shares @ $10 each (400) realized loss 300 shares purchased within sixty day window 400 shares sold 400 realized loss (300) less disallowed under the "wash" sale rules 100 recognized loss b 2,850 basis in the 300 shares purchased 300 disallowed loss under the "wash" sale rules 3,150 new basis in the 300 shares purchased on 1/19/2009 95,000 49 18,000 4,000 12,000 7,500 136,549 (24,000) 112,549 (38,659) (3,650) 70,240 70,240 (22,000) 48,240 (33,950) 14,290 Salary group term life ins. dividends qualified LTCG interest income award TOTAL income alimony paid AGI less itemized deductions less exemption taxable income 13,500 4,300 61 * * taxable income qualified dividends and LTCG less beg. Of bracket amount excess over bracket amount 25% 3,573 4,675 3,300 11,548 (13,500) (4,300) (6,253) tax rate from bracket tax on excess amount tax from bracket tax on qualified dividends & LTCG @ 15% * 22,000 total income tax liability less federal tax withheld less federal estimated payments net overpayment\refund due Purchase price less depreciation taken less casualty loss taken less insurance recovery street paving assessment sidewalk assessment Net cost of medical improvemen Adjusted basis when sold personal use asset is recognized for income tax purposes. personal residence is not recognized for income tax purposes. n loss on his personal residence is not recognized for income tax purposes. s are not recognized for income tax purposes. basis when lost recognized gain for income tax purposes. is not recognized for income tax purposes. ny stock sales through 7-1-2007. G @ $70 07 purchase $75 lized & recognized loss 12,600 (13,500) (900) STCL 29,700 (27,000) 2,700 LTCG 13,500 (9,000) (2,100) 2,400 LTCG 37,500 @ $330 07 PURCHASE $300 lized & recognized gain 07 purchase $75 /07 purchase $70 lized & recognized gain U @ $500 07 PURCHASE $300 08 PURCHASE $375 dividend ommon stock on the date of distribution referred stock shares received on the date of distribution basis in common stock = basis in common stock = mmon prior to the stock dividend mmon received as stock dividend res of common stock after the stock dividend mon shares when stock dividend received res of common stock rights received tock held = 16.7% if this % exceeds 15%, then part of the basis of the stock must be allocated to the rights. = = 1/7 x $5,000 6/7 x $5,000 f rights d upon expiration of stock rights, any allocated basis the basis came from when allocated. rights received tock held = 12.50% since the % does not exceed 15% allocation is not mandatory but s to the taxpayer. 825,000 in the hands of the donor x Gift tax paid = 295,000 x 392000 1,107,000 = ppreciation in the hands of the donor 825,000 104,463 929,463 asset at a gain, then the donee's basis is the donor's basis; If the donee ss, then the donee's basis is the FMV of the asset at the date of gift; however, asset at a price that falls between the donor's basis and the asset's FMV at ss is recognized upon disposition by the donee. DoD Date of distribution AVD 10,000 10,000 125,000 85,000 60,000 300,000 325,000 100,000 110,000 535,000 505,000 a b basis when sold party, therefore,no loss recognized by Jessie. sales price of car 5,500 al costs of Jessie's disallowed loss less basis (donor's basis) realized gain recognized gain (5,000) 500 500 Only the original transferree in a related party transaction can utilize a disallowed loss. shares @ $10 each ased within sixty day window x $400 realized loss = ed under the "wash" sale rules 300 loss subject to the "wash" sale rules Not currently recognized 00 shares purchased ss under the "wash" sale rules the 300 shares purchased on 1/19/2009 federal wh tax fed estimated payments Sally's medical expenses Orthodontic for kendra Psych exp for John less 7.5% AGI 112,549 deductible medical expenses state withhold tax est state tax payments property taxes-real est. property taxes personalty charitable contributions mortgage interest sales tax paid Total itemized deductions 12,500 4,000 3,500 20,000 (8,441) 11,559 4,500 2,500 5,500 7,100 7,500 38,659 sale of microsoft stock 45,000 less adjusted basis when sold LTCG @ 15% * 22,000 PERSONAL CASUALTY LOSS: LOSS AMOUNT IS THE LESSER OF THE ADJUSTED BASIS OF THE ASSET OR THE DECLINE IN FMV BEFORE AND AFTER THE EVENT ADJUSTED BASIS fmv BEFORE THE CRASH FMV after the crash decline in FMV less insurance recovery Gambling losses (41,000) 4,000 LTCG 15,000 12,500 12,500 12,500 (12,500) - 50,000 land sales price 475,000 less adjusted basis (500,000) realized loss (25,000) recognized loss James, the buyer is John's brother, and therefore, he is a related party, the loss is disallowed. group term insurance less maximum no tax excess over maximum number of $1,000 table amount per month per $1,000 for 35 yr old number of months of coverage total income amount 95,000 (50,000) 45,000 45 0.09 12 49 chase price depreciation taken casualty loss taken insurance recovery et paving assessment walk assessment cost of medical improvement usted basis when sold 200,000 (4,500) (5,500) (13,500) 7,000 8,000 7,000 198,500 60 30,000 (18,000) 15 7,500 (5,625) 12,000 LTCG 1,875 STCG 98,214 basis in the 1,000 common shares 1,786 basis in the 20 preferred shares 100,000 = $93.54 basis per share is % exceeds 15%, then t of the basis of the stock t be allocated to the rights. 714 rights basis 4,286 stock basis 5,000 e the % does not exceed 15%, basis cation is not mandatory but still is optional e taxpayer. Gift tax attributable to appreciation in the hands of the donor 104,463 wever, lated party subject to the sh" sale rules currently gnized 4,500 2,300 ...
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This note was uploaded on 03/19/2011 for the course ACCT 4 taught by Professor Berry during the Spring '11 term at Old Dominion.

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