tax quiz 10-12 - Capital assets do not include inventory,...

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Capital assets do not include inventory, depreciable property, copyrights, accounts receivable, or literary, musical or artistic compositions. Answer: True False Correct Marks for this submission: 1/1. Question 2 Marks: 1 For the individual taxpayer, all gain recognized is 15-percent gain if 15- year, 18-year, or 19-year real property under ACRS is depreciated on a straight- line basis. Answer: True False Under ACRS, any 15-year, 18-year, or 19-year real property for which an election to depreciate on a straight-line basis is Section 1250 property and there is then no recapture of gain as ordinary income. However, any remaining unrecaptured depreciation is recognized and taxed at a maximum rate of 25 percent. Incorrect Marks for this submission: 0/1. Question 3 Marks: 1 If a taxpayer had elected to expense, under Code Sec. 179, all or part of qualifying depreciable business assets and the assets are disposed of in a later tax year, any gain recognized is treated as ordinary income to the extent of Choose one answer. a. the amount expensed. b. depreciation deducted. c. depreciation deducted over the straight-line rate. d. (a) and (b). e. (a) and (c). Both the amount expensed under Sec. 179 and the depreciation deducted is recaptured or recognized as ordinary income. Incorrect Marks for this submission: 0/1. Question 4 Marks: 1
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Tom Thompson sells shares of Section 1244 stock for $50,000. He purchased the stock years ago for $175,000. How is the loss treated on Tom's tax return if he files a joint tax return with his spouse? Choose one answer. a. $125,000 ordinary loss. b. $100,000 ordinary loss; $25,000 long-term cap c. $25,000 ordinary loss; $100,000 long-term cap d. $125,000 short-term capital loss. e. $125,000 long-term capital loss. As a joint filer, Tom and his spouse can take up to $100,000 ordinary loss and the remaining $25,000 is a long-term capital loss on sale of Section 1244 stock. Incorrect Marks for this submission: 0/1. Question 5 Marks: 1 For 2011, Joyce Jacobson's books and records reflected the following: Taxable income $35,000 Short-term capital gain 500 Short-term capital loss (4,800) Long-term capital gain 1,500 Long-term capital loss (2,600) What is the amount of Joyce's capital loss carryover to 2012? Choose one answer. a. $2,400 short-term; $0 long-term b. $1,300 short-term; $1,100 long-term c. $1,900 short-term; $3,500 long-term d. $4,300 short-term; $1,100 long-term Joyce has a net STCL of $4,300 and a net LTCL of $1,100 for a net overall loss of $5,400. She will get a $3,000 deduction in 2011 and a carryover to 2012 of $2,400,
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consisting of a $1,300 STCLCO and $1,100 LTCLCO. Short-term capital losses are used up first. * This question has been adapted from the IRS Examinations. Incorrect
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tax quiz 10-12 - Capital assets do not include inventory,...

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