QUESTION 15 Martell incurred a net long-term capital loss of $4,000 and no short-term capital gains...

QUESTION 15

Martell incurred a net long-term capital loss of $4,000 and no short-term capital gains or losses. Assuming his other income is $40,000, he will be able to deduct what amount?

a.
$2,400

b.
$4,000

c.
$2,000

d.
$3,000

QUESTION 16

If the taxpayer qualifies under § 1033 (nonrecognition of gain from an involuntary conversion), makes the appropriate election, and the amount reinvested in replacement property is less than the amount realized, realized gain is:

	a.	Recognized to the extent of realized gain.
	b.	Permanently not subject to taxation.
	c.	Recognized to the extent of the deficiency (amount realized not reinvested)
	d.	Recognized to the extent of the amount reinvested in excess of the adjusted basis.

Solutions

Expert Solution

QUESTION 15
Martell incurred a net long-term capital loss of $4,000 and no short-term capital gains or losses. Assuming his other income is $40,000, he will be able to deduct what amount?
a.	$2,400
b.	$4,000
c.	$2,000
d.	$3,000	Correct	if Martell don't have capital gains to offset the capital loss, he can use a capital loss as an offset to ordinary income, up to $3,000 per year and remaining 1000 will be carried forward to future tax years.
QUESTION 16
If the taxpayer qualifies under § 1033 (nonrecognition of gain from an involuntary conversion), makes the appropriate election, and the amount reinvested in replacement property is less than the amount realized, realized gain is:
a.	Recognized to the extent of realized gain.
b.	Permanently not subject to taxation.
c.	Recognized to the extent of the deficiency (amount realized not reinvested)	Correct	If the amount reinvested in replacement property is less than the amount realized, realized gain is recognized to the extent of the deficiency. Deficiency is the shortfall in amount reinvested.
d.	Recognized to the extent of the amount reinvested in excess of the adjusted basis.

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

After netting all of his short-term and long-term capital gains and losses, Sam has a net...

After netting all of his short-term and long-term capital gains and losses, Sam has a net short-term capital loss and a net long-term capital gain/ Can he net the ST capital loss and LT capital gain against each other? Why or why not? Also, Sam purchased equipment for use in his business for $60,000 back in 2014. He has taken $37,500 of regular MACRS depreciation. Sam then sells the equipment in 2017 for $28,500. What is the amount and character...

Bass, a C corporation, has a net short-term capital gain of $20,000 and a net long-term...

Bass, a C corporation, has a net short-term capital gain of $20,000 and a net long-term capital loss of $90,000 during 2019. Bass also has taxable income from other sources of $1 million. a. Assume there are no prior year capital transactions. How are the 2019 capital gains and losses treated on Bass’ 2019 tax return and is there any potential impact to other tax years? b. If Bass were a proprietorship, how would Ellen, the owner, report these transactions...

Ostrich, a C corporation, has a net short-term capital gain of $20,000 and a net long-term...

Ostrich, a C corporation, has a net short-term capital gain of $20,000 and a net long-term capital loss of $90,000 during 2019. Ostrich has $425,000 in taxable income from other sources. Prior years’ transactions included the following: 2014 net short-term capital gains $10,000 2015 net long-term capital gains 18,000 2016 net long-term capital gains 15,000 2017 net short-term capital gains 25,000 2018 net long-term capital gains 5,000 Required: a. How are the capital gains and losses treated on Ostrich’s 2019...

(Capital Gains and Losses – Introduction). In 2018, Steven Spielberg (single) has $5,000 of net short-term...

(Capital Gains and Losses – Introduction). In 2018, Steven Spielberg (single) has $5,000 of net short-term capital loss and $17,000 of net long-term capital loss. In 2019, he has $2,000 of net short-term capital gain, $8,000 of net 28% long-term capital gain, and $4,000 of net 0%/15%/20% long-term capital gain. Determine the type (short-term or long-term) and amount of capital loss to be carried forward to 2019 and 2020, respectively. Very well organised, please how every step.

What is a Capital Asset?, Holding Period, and Calculation of Gain or Loss, Net Capital Gains...

What is a Capital Asset?, Holding Period, and Calculation of Gain or Loss, Net Capital Gains (LO 8.1, 8.2, 8.3) During 2017, Tom sold Sears stock for $26,200. The stock was purchased 4 years ago for $36,680. Tom also sold Ford Motor Company bonds for $91,700. The bonds were purchased 2 months ago for $77,945. Home Depot stock, purchased 2 years ago for $2,620, was sold by Tom for $3,930. Calculate Tom's net gain or loss, and indicate the nature...

Farah’s Fashions has net working capital of $600, long-term debt of $4,000, total assets of $8,200...

Farah’s Fashions has net working capital of $600, long-term debt of $4,000, total assets of $8,200 and net fixed assets of $4,200. What is the amount of total liabilities? Select one: a. $3,400 b. $4,000 c. $4,130 d. $7,400 e. None of the above.

In 2018, Jenny, a single taxpayer, had a $15,000 net short-term capital loss and taxable income...

In 2018, Jenny, a single taxpayer, had a $15,000 net short-term capital loss and taxable income of $120,000. In 2019, Jenny has an $18,000 long-term capital gain on one transaction and no other capital gain or loss transactions. Which of the statements below is correct? a. Jenny has a 2019 $18,000 net capital gain. b. Jenny has a 2019 $9,000 net capital loss. c. Jenny has a 2019 $9,000 net capital gain. d. Jenny has a...

For 2015, Sherri has a short-term loss of $2,960 and a long-term loss of $4,800. 1.How...

For 2015, Sherri has a short-term loss of $2,960 and a long-term loss of $4,800. 1.How much loss can Sherri deduct in 2015 2.How much loss will Sherri carryover to 2016, and what is the character of the loss carryover? Rich and Shauna Nielson file a joint tax return, and they itemize deductions. Assume their marginal tax rate on ordinary income is 25 percent. The Nielsons incur $2,100 in miscellaneous itemized deductions, excluding investment expenses. They also incur $1,500 in...

During 2018, Crown Corporation, a calendar year C corporation, has net short-term capital gains of $50,000,...

During 2018, Crown Corporation, a calendar year C corporation, has net short-term capital gains of $50,000, net long-term capital losses of $80,000, and taxable income from other sources of $270,000. Prior years' transactions included the following. 2014 net short-term capital gains $12,000 2015 net long-term capital gains 10,000 2016 net short-term capital gains 9,500 2017 net long-term capital gains 7,000 If an amount is zero, enter "0". a. How much is Crown's net capital loss for 2018? $ What is...

How do different kind of capital short and long-term, as well as long term foreign direct...

How do different kind of capital short and long-term, as well as long term foreign direct investments affect development prospects?

Subjects