Ch7 outline

Ch7 outline - CH 7 Capital Gains Other Sales Terms and Tax Forms o Amount realized < adjusted basis = loss o Amount realized > adjusted basis =

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CH 7 – Capital Gains Other Sales Terms and Tax Forms o Amount realized < adjusted basis = loss o Amount realized > adjusted basis = gain CLASSIFICATION OF ASSETS o Ordinary income property (not a capital asset) o Sec. 1221 Property (capital assets) o Sec. 1231 trade or business property o Ordinary Income Property Regular rates Losses fully deductible o Sec. 1221 Capital Property Held more than 1 yr Used for personal purposes or investment o Sec. 1232 Trade or Bus. Property Held more than 1 year Depreciated SALES OF CAPITAL ASSETS o Only long term capital gains receive preferential tax treatment o “carryover” basis for gifts, exchanges or inheritances holding period includes transferor’s holding period inherited property ALWAYS long term o Capital Gain Rates 0% or 15% (25% bracket and above) for assets 25%- special rate that relates to capital gains generated from depreciable real property (buildings) used in a trade or business >>
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This note was uploaded on 03/30/2012 for the course ACCT 3221 taught by Professor Armentor during the Spring '08 term at LSU.

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Ch7 outline - CH 7 Capital Gains Other Sales Terms and Tax Forms o Amount realized < adjusted basis = loss o Amount realized > adjusted basis =

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