Advance Tax

In December 2019, Nell, Inc., an accrual basis taxpayer, paid $12,000 for insurance premiums for the 2020 calendar year. How much of the premiums can Nell, Inc., deduct in 2019?

$12,000

Maria and Javier are the equal partners in MarJa, a partnership that is a qualfied trade or business. In the current year, MarJa generated $373,000 of ordinary income after reporting $447,600 in guaranteed payments to Maria and Javier for their services to MarJa ($223,800 each). b. What is Maria's and Javier's qualified business income if MarJa had incurred $522,200 of ordinary income after reporting $223,800 in guaranteed payments to Maria and Javier ($111,900 each)? $

261,100

Jerry inherits an asset from his uncle, who purchased the asset five days before he died. Which of the following statements is correct? a.If Jerry sells the asset a few days after receiving it, any gain or loss on the sale will be short term. b.Jerry's basis in the asset is the carryover basis from his uncle. c.Jerry's basis is the FMV on the alternate valuation date or date it is distributed to him. d.Jerry's basis is the FMV on his uncle's date of death.

d.Jerry's basis is the FMV on his uncle's date of death.

Which of the following statements is not correct? a.If an asset is acquired by gift and the FMV on the date of gift is lower than the donor's carryover basis, the recipient's basis cannot be determined until the asset is disposed of. b.The basis of an asset that is purchased must be adjusted for depreciation allowable. c.The general rule for the basis of property acquired by gift is a carryover of basis from the donor. d.The basis of property acquired from a decedent is always the FMV on the date of death.

d.The basis of property acquired from a decedent is always the FMV on the date of death.

On August 31, 2018, Harvey and Ling, who file a joint return and live in Charleston, South Carolina, sell their personal residence, which they have owned and lived in for 10 years. The realized gain of $309,400 was excluded under § 121. They purchased another personal residence in Charleston for $495,040 on September 1, 2018. However, in 2019, Harvey's employer transfers him to Houston, Texas. The couple sells the Charleston home on February 28, 2019, and purchases a new home in Houston. The realized gain on the second sale is $278,460. Do not round any division. What is Harvey and Ling's recognized gain on the second sale?

$153,460

Delaine is a 90% shareholder in a personal service corporation (PSC). The corporation paid Delaine a salary of $390,050 during its fiscal year ending September 30, 2019. If required, round your answers to the nearest dollar. b. Assume that the corporation cannot satisfy the business purpose test or salary test for a fiscal year. The corporation pays Delaine a salary of $78,010 for October 1 through December 31, 2019, and salary of $468,060 from January 1, 2020, through September 30, 2020. How much must the corporation limit its deduction for salary for its fiscal year ending September 30, 2020, in order to retain the fiscal year?

$312,040

Delaine is a 90% shareholder in a personal service corporation (PSC). The corporation paid Delaine a salary of $390,050 during its fiscal year ending September 30, 2019. If required, round your answers to the nearest dollar. a. Assume that the corporation cannot satisfy the business purpose test for a fiscal year. How much salary must Delaine receive during the period October 1 through December 31, 2019, in order for the corporation to continue to use its fiscal year?

$97,513

In 2019, Meghann Carlson, a single taxpayer, reports QBI of $116,400 and modified taxable income of $81,480 (this is also her taxable income before the QBI deduction). What is Meghann's QBI deduction? Meghann's QBI deduction is $

16,296

For 2019, Essence Company, a calendar year taxpayer, will change from using the cash method for tax purposes to the accrual method. At the end of 2018, Essence showed the following items. Accounts receivable $459,400 Accounts payable 275,640 Bank loan 229,700 What is the § 481(a) adjustment for this change in accounting method? Indicate whether the adjustment is positive or negative. $______; _____ Essence will report this amount in its income equally over ____ years beginning in____

183,760 positive four 2019

Maria and Javier are the equal partners in MarJa, a partnership that is a qualfied trade or business. In the current year, MarJa generated $373,000 of ordinary income after reporting $447,600 in guaranteed payments to Maria and Javier for their services to MarJa ($223,800 each). a. What is Maria's and Javier's qualified business income? $

186,500

Dexter owns a large tract of land and subdivides it for sale. Assume that Dexter meets all of the requirements of § 1237 and during the tax year sells the first eight lots to eight different buyers for $127,400 each. Dexter's basis in each lot sold is $89,180, and he incurs total selling expenses of $5,096 on each sale. What is the amount of Dexter's capital gain and ordinary income? If required, round your answers to the nearest dollar. Dexter has a realized and recognized gain of $_____, of which $____ is classified as ordinary income and $______ as a capital gain

264,992 10,192 254,800

Jason and Paula are married. They file a joint return for 2019 on which they report taxable income before the QBI deduction of $232,000. Jason operates a sole proprietorship, and Paula is a partner in the PQRS Partnership. Both are a qualified trade or business, and neither is a specified services business. Jason's sole proprietorship reports $172,000 of qualified business income, reports W-2 wages of $29,600, and owns qualified property of $13,500. Paula's partnership reports a loss for the year, and her allocable share of the loss is $36,700. The partnership reports no W-2 wages, and Paula's share of the partnership's qualified property is $12,800. Assume the QBI amount is net of the self-employment tax deduction. What is their QBI deduction for the year? $`

27,060

Sally owns real property for which the annual property taxes are $13,530. She sells the property to Kate on April 2, 2019, for $676,500. Kate pays the real property taxes for the entire year on October 1, 2019. a. How much of the property taxes can be deducted by Sally and how much by Kate? Sally can deduct $____ and Kate can deduct $_____ of the property taxes

3,373 10,157

Constanza, who is single, sells her current personal residence (adjusted basis of $271,500) for $760,200. She has owned and lived in the house for 30 years. Her selling expenses are $38,010. What is Constanza's realized and recognized gain? Constanza's realized gain is $_____ and her recognized gain would be $_______

450,690 200,690

Lisa sells business property with an adjusted basis of $230,900 to her son, Alfred, for its fair market value of $184,720. a. What is Lisa's realized and recognized gain or loss? Lisa has a $____ realized _____ of which $____ is recognized.

46,180 loss 0

In 2019, Aurora received a $57,900 bonus computed as a percentage of profits. In 2020, Aurora's employer determined that the 2019 profits had been incorrectly computed, and Aurora had to refund the $17,370 in 2020. Assume that Aurora was in the 35% tax bracket in 2019 but in the 12% bracket in 2020. If required, round your final answers to the nearest dollar. a. In 2019, how much is Aurora required to include in income? $ b. In 2020, what is the amount of the deduction Aurora can claim? $ What is the reduction in taxes for 2020 as a result of the deduction? $

57,900 17,370 6080

Sally owns real property for which the annual property taxes are $13,530. She sells the property to Kate on April 2, 2019, for $676,500. Kate pays the real property taxes for the entire year on October 1, 2019. d. How would the answers in parts (b) and (c) differ if Sally paid the taxes? If Sally paid the taxes, Sally's amount realized would be $____ Kate's adjusted basis would be $______

666,343 666,343

In 2019, Skylar sold an apartment building for $86,200 cash and a $862,000 note due in two years. Skylar's cost of the property was $689,600, and he had deducted depreciation of $413,760, $165,504 of which was in excess of what the straight-line amount would have been. If required, round any division to two decimal places and your final answers to the nearest dollar. a. Under the installment sales method, what is Skylar's total realized gain? $ b. In 2019, how much § 1250 gain does Skylar recognize? $ How much § 1231 gain does he recognize? $

672,360 165,504 ??

On December 30, 2019, Whitney sold a piece of property for $85,000. Her basis in the property was $40,000, and she incurred $1,200 in selling expenses. The buyer paid $5,000 down with the balance payable in $10,000 installments over the next eight years. In addition, the buyer assumed a $15,000 mortgage on the property. Under the installment sales method, what is the total contract price, the total gain on the sale, and the amount of gain reported in 2019? Round any division to four decimal places, and use that amount in subsequent computations. Round your final answer to the nearest dollar. Under the installment sales method, the total contract price is $_____, the total gain on the sale is $____ and the amount of gain reported in 2019 is $_____

85,000 58,800 3459

Melba purchases land from Adrian. Melba gives Adrian $369,400 in cash and agrees to pay Adrian an additional $554,100 one year later plus interest at 9%. a. What is Melba's adjusted basis for the land at the acquisition date? Melba's adjusted basis for the land at the acquisition date is $_____

923,500

Melba purchases land from Adrian. Melba gives Adrian $369,400 in cash and agrees to pay Adrian an additional $554,100 one year later plus interest at 9%. b. What is Melba's adjusted basis for the land one year later? Melba's adjusted basis for the land one year later is $

923,500

Thad, a single taxpayer, reports taxable income before the QBI deduction of $195,500. Thad, a CPA, operates an accounting practice as a single member LLC (which he reports as a sole proprietorship). During the tax year, his proprietorship generates qualified business income of $156,400 after deducting self-employment taxes, W-2 wages of $117,300, and $8,400 of qualified property. Assume the QBI amount is net of the self-employment tax deduction. If required, round any division to two decimal places. Round your final answer to the nearest dollar. What is Thad's QBI deduction? $

9384

Charlotte is a partner in, and sales manager for, CD Partners, a domestic business that is not a specified services trade or business. During the tax year, she receives guaranteed payments of $158,200 from CD Partners for her services to the partnership as its sales manager. In addition, her distributive share of CD Partners' ordinary income (its only item of income or loss) was $94,920. What is Charlotte's qualified business income? $

94,920

Complete the statement below in response to the question, "Can a sole proprietorship form as a single member limited liability company (LLC)?" _____. Most states _____ for single member LLCs. Under the default rules of the check-the-box Regulations, a single member LLC is taxed as a ____________ and by filing Form 8832 a single member LLC is taxed as a _______

Yes allow sole proprietorship corporation

Olivia wants to buy some vacant land for investment purposes. She cannot afford the full purchase price. Instead, Olivia pays the landowner $38,700 to obtain an option to buy the land for $774,000 anytime in the next four years. Fourteen months after purchasing the option, Olivia sells the option for $48,375. What is the amount and character of Olivia's gain or loss? She has _____________ of $______

a long-term capital gain 9,675

Conner purchased 300 shares of Zinco stock for $30,000 in year 1. On May 23, year 6, Conner sold all the stock to his daughter Alice for $20,000, its then fair market value. Conner realized no other gain or loss during year 6. On July 26, year 6, Alice sold the 300 shares of Zinco for $25,000. What was Alice's recognized gain or loss on her sale? a.$0 b.$5,000 long-term gain c.$5,000 short-term loss d.$5,000 long-term loss

a.$0

Susie purchased her primary residence on March 15, year 4, for $550,000. She sold it on October 15, year 7, for $240,000. What amount of loss from the sale is recognized on her year 7 income tax return? a.$0 b.$60,000 c.$250,000 d.$310,000

a.$0

Agnes sold 50 shares of ABC stock to her son, Steve, in year 4 for $42,000. She bought the stock eight years ago for $50,000. Steve sold the stock to an unrelated party in year 6 for $60,000. How much gain will Steve recognize from the sale in year 6? a.$10,000 b.$0 c.$60,000 d.$18,000

a.$10,000

Paula has sales that qualify to be reported on the installment basis. In year 2, installment sales were $40,000 with a cost of $30,000. In year 3, installment sales were $50,000 with a cost of $25,000. Collections in year 2 were in the amount of $30,000. Collections in year 3 were $10,000 on the year 2 sales and $30,000 on the year 3 sales. How much deferred gross profit exists as of the end of year 2? a.$2,500 b.$5,000 c.$7,500 d.$10,000

a.$2,500

Jerry uses a building for business purposes. The building was purchased on April 1, year 3, for $124,000. It was sold on October 3, year 6, for $200,000. Accumulated depreciation as of the date of sale was $14,000, $4,000 of which was in excess of straight line. How much of the gain in year 6 is recaptured as ordinary under Section 1250? a.$4,000 b.$10,000 c.$14,000 d.$100,000

a.$4,000

On January 25, year 10, Mother Hall gave her daughter, Nadyne, 500 shares of common stock of XYZ, Corp. The fair market value of the stock on January 25 was $2,000. Mother Hall had paid $4,000 for the stock three years earlier. Nadyne decided a month after receiving the stock that she doesn't want to hold it and sold it for $1,000, the fair market value at the time of the sale. How much income (loss) must Nadyne include in her tax return for year 10 in regards to the sale of the stock? a.($1,000) b.($3,000) c.($2,000) d.$0

a.($1,000)

Which of the following is considered a specified service trade or business (SSTB) for purposes of the qualifying business income deduction? a.Accounting firm b.Manufacturing company c.Engineering firm d.Architectural services

a.Accounting firm

A piece of depreciable machinery is sold. It has been held for three years and qualifies as Section 1231 property. The selling price is greater than the adjusted basis, but less than the original purchase price. Which statement below is correct? a.All of the gain will be subject to Section 1245 recapture b.Only a portion of the gain will be subject to Section 1245 recapture c.None of the gain will be subject to Section 1245 recapture d.Section 1245 recapture will not apply because there is a loss on the sale

a.All of the gain will be subject to Section 1245 recapture

Which of the following is true about the qualifying business income (QBI) deduction for taxpayers with taxable income above the taxable income limitations? a.If the taxpayer is a specified service trade or business (SSTB), no QBI deduction is allowed. b.If the taxpayer is a qualified trade or business (QTB), W-2 wage and property limitations do not apply. c.If the taxpayer is a qualified trade or business (QTB), W-2 wage and property limitations are phased in. d.If the taxpayer is a specified service trade or business (SSTB), W-2 wage and property limitations apply.

a.If the taxpayer is a specified service trade or business (SSTB), no QBI deduction is allowed.

Section 1250 recapture applies to which of the following? a.Section 1231 real property sold at a gain with accumulated depreciation in excess of straight line. b.Section 1231 personal property sold at a gain with accumulated depreciation. c.Section 1231 real property sold at a gain with accumulated depreciation equal to straight-line depreciation. d.Section 1231 personal property sold at a loss.

a.Section 1231 real property sold at a gain with accumulated depreciation in excess of straight line.

Lena is a sole proprietor. In April of this year, she sold equipment purchased four years ago for $26,000 with an adjusted basis of $15,500 for $17,000. Later in the year, Lena sold another piece of equipment purchased two years ago with an adjusted basis of $8,200 for $5,500. What are the tax consequences of these tax transactions? Lena has ________ of $_____ from the sale of the first equipment. Lena has ________ of $______ from the sale of the second equipment.

an ordinary gain; 1,500 a 1231 loss; 2,700

In early year 8, Alice sold Tom, her son, 20 shares of common stock for $20,000. Alice had paid $25,000 for the stock in year 2. In late year 8, Tom sold the stock to an unrelated third party for $35,000. How much gain must Tom report in his year 8 tax return for the sale of the stock? a.$0 b.$10,000 c.$15,000 d.$5,000

b.$10,000

Jerry uses a building for business purposes. The building was purchased on April 1, year 3, for $124,000. It was sold on October 3, year 6, for $200,000. Accumulated depreciation as of the date of sale was $14,000, $4,000 of which was in excess of straight line. How much of the gain in year 6 is unrecaptured Section 1250 gain? a.$4,000 b.$10,000 c.$14,000 d.$100,000

b.$10,000

Marsha exchanged land in Florida with an FMV of $72,700 and an adjusted basis of $40,000 for land in Iowa with an FMV of $57,700. Marsha also assumed a $5,000 liability on the land received in the transaction and was relieved of a $20,000 liability on the land that was given up. What is Marsha's recognized gain on the transaction? a.$0 b.$15,000 c.$20,000 d.$32,700

b.$15,000

Wally, Inc., sold the following three personal property assets in year 6: Asset Purchase Date Cost Accumulated Depreciation Selling Price A 5/1/year 3 $5,000 $3,000 $2,300 B 8/13/year 4 1,200 500 2,000 C 2/18/year 4 3,800 1,800 1,500 What is Wally's net Section 1231 gain or loss in year 6? a.$500 loss b.$300 gain c.$800 gain d.$1,600 gain

b.$300 gain

Alice gifted stock to her son, Bob, in year 5. Alice bought the stock in year 1 for $8,300. The value of the stock on the date of gift was $6,400. Bob sold the stock in year 7 for $15,800. What is Bob's recognized gain or loss on the sale in year 7? a.$0 b.$7,500 gain c.$9,400 gain d.$15,800 gain

b.$7,500 gain

Brad and Angie are married and file a joint return. For year 14, they had income from wages in the amount of $100,000 and had the following capital transactions to report on their income tax return: *Carryover of capital losses from year 13 $200,000 *Loss on sale of stock purchased in March year 14, sold on October 10, year 14, and repurchased on November 2, year 14 20,000 *Gain on the sale of stock purchased 5 years ago and sold on March 14, year 14 15,000 *Gain on the sale of their personal residence (all qualifications have been met for the maximum allowable gain exclusion) 675,000 *Loss on the sale of their personal automobile 10,000 *Gain on the sale of their personal furniture 5,000 *Loss on the sale of investment property (land only) 150,000 What is the amount of capital loss carryover to year 15? a.($155,000) b.($152,000) c.($132,000) d.($125,000)

b.($152,000)

Section 1245 recapture applies to which of the following? a.Section 1231 real property sold at a gain with accumulated depreciation in excess of straight line. b.Section 1231 personal property sold at a gain with accumulated depreciation. c.Section 1231 real property sold at a gain with accumulated depreciation equal to straight-line depreciation. d.Section 1231 personal property sold at a loss.

b.Section 1231 personal property sold at a gain with accumulated depreciation.

Wally, Inc., sold the following three personal property assets in year 6: Asset Purchase Date Cost Accumulated Depreciation Selling Price A 5/1/year 3 $5,000 $3,000 $1,300 B 8/13/year 4 1,200 500 1,100 C 2/18/year 4 3,800 1,800 1,500 What is Wally's net Section 1231 gain or loss in year 6? a.$500 loss b.$700 loss c.$1,200 loss d.$1,200 gain

c.$1,200 loss

Rick purchased 100 shares of XYZ stock on April 4, year 4, for $8,600. He sold 50 shares on February 8, year 5, for $3,000. He then bought another 50 shares of XYZ on March 1, year 5, for $3,200. How much loss will Rick realize in year 5? a.$0 b.$5,600 c.$1,300 d.$3,000

c.$1,300

Marsha exchanged land in Florida with an FMV of $72,700 and an adjusted basis of $40,000 for land in Iowa with an FMV of $57,700. Marsha also paid $5,000 cash in the transaction and received an automobile worth $20,000. What is Marsha's recognized gain on the transaction? a.$0 b.$15,000 c.$20,000 d.$32,700

c.$20,000

John purchased a primary residence on October 15, year 2, for $240,000. On June 10, year 4, he married Karen, and she moved into the house. Karen was not added to the deed. On October 15, year 6, they moved out of the house. John sold the home on October 15, year 7, for $850,000. What amount of gain from the sale is recognized on their year 7 joint income tax return? a.$110,000 b.$122,000 c.$360,000 d.$610,000

c.$360,000

Chad owned an office building that was destroyed in a tornado. The adjusted basis of the building at the time was $890,000. After the deductible, Chad received an insurance check for $850,000. He used the $850,000 to purchase a new building that same year. How much is Chad's recognized loss, and what is his basis in the new building? Recognized Loss New Basis a.$0 $850,000 b.$0 . $890,000 c.$40,000 $850,000 d.$40,000 $890,000

c.$40,000 $850,000

Chad owned an office building that was destroyed in a tornado. The adjusted basis of the building at the time was $890,000. After the deductible, Chad received an insurance check for $950,000. He used $900,000 of the insurance proceeds to purchase a new building that same year. How much is Chad's recognized gain, and what is his basis in the new building? Recognized Gain New Basis a.$0 $890,000 b.$0 $900,000 c.$50,000 $890,000 d.$60,000 $900,000

c.$50,000 $890,000

Wally, Inc., sold the following three personal property assets in year 6: Asset Purchase Date Cost Accumulated Depreciation Selling Price A 5/1/year 3 $5,000 $3,000 $2,300 B 8/13/year 4 1,200 500 2,000 C 2/18/year 6 3,800 1,800 1,500 What is Wally's Section 1245 recapture in year 6? a.$500 loss b.$300 gain c.$800 gain d.$1,600 gain

c.$800 gain

Wally, Inc., sold the following three personal property assets in year 6: Asset Purchase Date Cost Accumulated Depreciation Selling Price A 5/1/year 3 $5,000 $3,000 $2,300 B 8/13/year 4 1,200 500 2,000 C 2/18/year 6 3,800 1,800 1,500 What is Wally's net Section 1231 gain or loss in year 6? a.$500 loss b.$300 gain c.$800 gain d.$1,600 gain

c.$800 gain

What is the basic calculation for the qualifying business income deduction? a.30% × Qualifying business income (QBI) b.20% × W-2 wages c.20% × Qualifying business income (QBI) d.30% × W-2 wages

c.20% × Qualifying business income (QBI)

Jasmin purchased 100 shares of Pinkstey Corporation (publicly traded company) on January 1 of year 1 for $5,000. The FMV of the shares at the end of year 1 was $6,000. On January 1 of year 4, Pinkstey Corporation declared a 2-for-1 stock split when the fair market value of the stock was $65 per share. On January 1 of year 5, Jasmin sold all of her Pinkstey Corporation stock when the fair market value was $40 per share. Which of the following statements is true? a.Jasmin reports $6,500 in gross income for the 2-for-1 stock split in year 4. b.Jasmin's basis in the Pinkstey Corporation stock at the end of year 4 is $65 per share. c.Jasmin has no taxable income for the Pinkstey Corporation stock in year 4. d.Jasmin owns 100 shares in Pinkstey Corporation stock at the end of year 4.

c.Jasmin has no taxable income for the Pinkstey Corporation stock in year 4.

On February 1 of the current year, Duffy learned that he was bequeathed 1,000 shares of common stock under his father's will. Duffy's father had paid $12,500 for the stock 20 years ago. Fair market value of the stock on February 1 of the current year, the date of his father's death, was $14,000 and had increased to $15,500 six months later. The executor of the estate elected the alternative valuation date for estate tax purposes. Duffy sold the stock for $14,500 on June 1 of the current year, the date that the executor distributed the stock to him. How much income should Duffy include in his current-year individual income tax return for the inheritance of the 1,000 shares of stock which he received from his father's estate, assuming the estate tax law in effect for 2011 and forward? a.$4,000 b.$2,500 c.$5,500 d.$0

d.$0

Calculate the taxpayer's 2019 qualifying business income deduction for a qualified trade or business: Filing status: Single Taxable income: $180,000 Net capital gains: $0 Qualified business income (QBI): $80,000 W-2 wages: $20,000 a.$16,000 b.$10,000 c.$2,700 d.$13,684

d.$13,684

Calculate the taxpayer's 2019 qualifying business income deduction for a qualified trade or business. Filing status: Single Taxable income: $100,000 Net capital gains: $0 Qualified business income (QBI): $30,000 W-2 wages: $10,000 a.$5,000 b.$70,000 c.$20,000 d.$6,000

d.$6,000

Marsha exchanged land in Florida with an FMV of $52,700 and an adjusted basis of $60,000 for land in Iowa with an FMV of $57,700. Marsha also paid $5,000 cash in the transaction. What is Marsha's basis in the land received? a.$55,000 b.$57,700 c.$60,000 d.$65,000

d.$65,000

Which of the following statements is true regarding taxpayers with taxable income below the taxable income limitations for the qualifying business income (QBI) deduction? a.QBI deduction is allowed only for a qualified trade or business (QTB). b.QBI deduction is phased out if a specified service trade or business (SSTB). c.QBI deduction is limited to 50 percent of W-2 wages. d.A qualified trade or business (QTB) and specified trade or business (SSTB) are treated the same.

d.A qualified trade or business (QTB) and specified trade or business (SSTB) are treated the same.

Net Section 1231 losses are: a.Deducted as a capital loss against other capital gains and nothing against ordinary income b.Deducted as a capital loss against other capital gains and up to $3,000 against ordinary income c.Not allowed as a deduction d.Deducted as an ordinary loss

d.Deducted as an ordinary loss

A gain on the sale of which of the following assets will not result in a capital gain? a.Stock in a public company. b.A home used as a personal residence. c.Goodwill of a corporation. d.Inventory of a corporation.

d.Inventory of a corporation.

In December 2019, Carl Corporation sold land it held as an investment. The corporation received $50,000 in 2019 and a note payable (with adequate interest) for $150,000 to be paid in 2021. Carl Corporation's cost of the land was $80,000. The corporation has a $90,000 net capital loss carryover that will expire in 2019. Complete the statement below as to whether Carl Corporation should report the sale in 2019 or use the installment method to report the income as payments are received. Carl Corporation should ______________ the installment method since the gain of $_____, ___ be used to offset the net capital loss carryover.

elect to forgo the use of 120,000 can

Lisa sells business property with an adjusted basis of $230,900 to her son, Alfred, for its fair market value of $184,720. b. What is Alfred's recognized gain or loss if he subsequently sells the property for $253,990? For $150,085? If Alfred sells the property for $253,990, he has a recognized ____of $_______ If Alfred sells the property for $150,085, he has a recognized ____of $______

gain; 23,090 loss; 34,635

Auralia owns stock in Orange Corporation and Blue Corporation. She receives a $10,000 distribution from both corporations. The instructions from Orange state that the $10,000 is a dividend. The instructions from Blue state that the $10,000 is not a dividend. Complete the following statements to explain the difference in the treatment of the distributions. Orange Corporation apparently __________________ resulting in the distribution being treated as _______ Blue Corporation __________________ to cover the amount of the distribution resulting in the distribution being treated as ________

has adequate earning profits a dividend does not have adequate earnings and profits a return of capital

Sally owns real property for which the annual property taxes are $13,530. She sells the property to Kate on April 2, 2019, for $676,500. Kate pays the real property taxes for the entire year on October 1, 2019. b. What effect does the property tax apportionment have on Kate's adjusted basis in the property? Kate's adjusted basis for the property is______ by the $_____ she paid that is apportioned to Sally

increased 3,373

Sally owns real property for which the annual property taxes are $13,530. She sells the property to Kate on April 2, 2019, for $676,500. Kate pays the real property taxes for the entire year on October 1, 2019. c. What effect does the apportionment have on Sally's amount realized from the sale? Sally paid none of the real property taxes and ____permitted to deduct the apportioned share of $____. Her amount realized is____ by this amount.

is 3,373 increased

Enzo is a single taxpayer with the following gains and losses for 2019: • $12,900 short-term capital loss. • $141,900 long-term capital gain from sale of stock. • $77,400 § 1231 gain that is all unrecaptured § 1250 gain. What is the amount and character of Enzo's gain or loss? Enzo's net_________ is $_____ and his potential unrecaptured § 1250 gain that is subject to the 25% tax rate is $______

long-term capital gain 206,400 64,500

Coline has the following capital gain and loss transactions for 2019. a. Short-term capital gain $12,900 b. Short-term capital loss (5,418) c. Long-term capital gain (28%) 15,480 d. Long-term capital gain (15%) 5,160 e. Long-term capital loss (28%) (27,090) After the capital gain and loss netting process, what is the amount and character of Coline's gain or loss? Coline has an overall _____________ of $ ______

net short-term capital gain 1,032

Karla exchanges personal use property for property to be held for productive use in a trade or business. Can this transaction qualify for like-kind exchange treatment? _____ To qualify for like-kind exchange treatment, the property must be held for_____________________ and must be __________.

no productive use in a trade or business or be held for investment real property

Would a tax year ending December 31 be appropriate for a ski lodge? Why or why not? ____ The only business purpose for a fiscal year that the IRS has acknowledged is the need to conform ________________________________

no the tax year to the natural business year of a company