37.An individual had the following gains and losses during 2009 on property held for the long-term holding period: sale of Orange common stock ($8,000 gain); sale of real property used in the taxpayer’s business ($1,800 loss); destruction of real property used in the taxpayer’s business by fire ($1,000 loss). Which of the following is correct?a.The fire loss would reduce the real property sale loss.b.The fire loss would reduce the stock sale gain.c.The sale of real property loss would be netted against the stock sale gain.d.The sale of real property is a § 1231 loss.e.None of the above.ANS: DThe sale of the Orange stock produces a $8,000 LTCG, which is fully includible in gross income. The real property sale results in a net §1231 loss of $1,800. The real property $1,000 fire loss is treated as an ordinary loss because there are no casualty gains against which it can be netted.
PTS:1DIF:2REF:p. 8-23 | p. 8-28OBJ:6NAT:AICPA FN-Measurement | AACSB AnalyticMSC:5 min38.Spencer has an investment in two parcels of vacant land. Parcel 1 is a capital asset and parcel 2 is a § 1231 asset. Spencer already has short-term capital loss for the year he would like to offset with capital gain. Spencer has § 1231 lookback loss that exceeds the gain from the disposition of either land parcel. Spencer only wants to sell one land parcel and each of them would yield the same amount of gain. The gain that would be recognized exceeds the short-term capital loss Spencer already has. Which of the statements below is correct?
PTS:1DIF:2REF:p. 8-18 | p. 8-23 to 8-28OBJ:6NAT:AICPA FN-Reporting | AACSB AnalyticMSC:10 min