you ask Sally and Jim if they sold any assets this year. They provide you with...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
you ask Sally and Jim if they sold any assets this year. They provide you with the following: • Sally and Jim have an investment account and report a ($10,000) net short-term capital loss on the sale of stock and a net long-term capital gain of $5,000 on the sale of stock. In addition, the investment account reports they earned $3,500 of qualified dividends. • In December of the current tax year, Sally and Jim sold their home. This home was their primary residence that they had lived in for the last 15 years. They calculated that the gain on the sale of their home was $515,000. ($1,000,000 sales price less $485,000 adjusted tax basis). • Sally and Jim sold a coin collection for $45,000. They had inherited the coin collection in three years ago when a relative passed away and the coin collection had an FMV of $40,000. The relative had originally purchased the coin collection for $35,000 in 2005. • Sally and Jim also sold one of their personal vehicles. They had originally purchased the vehicle in a decade ago for $35,000. They sold it this year for $12,000. • In the current tax year, Sally and Jim sold stock to Sally's sister Kelly for $25,000 (the fair market value). They had originally purchased the stock in 2004 for $27,000. On January 10, 2023 Sally and Jim sold 1,000 shares of XYZ Corp. stock for $50,000. They had originally purchased the stock in 2016 for $51,000. On January 20, 2023 they decided they liked that stock and decide to buy back 250 shares of XYZ Corp. stock for $15,000. • Finally, Jim informs you that he sold two assets used in his business this year. o Jim sold land purchased in 2005 for $200,000 and sold for $225,000 Jim also sold equipment purchased in 2019 for $75,000 with A/D of $75,000 (fully depreciated) and sold for $10,000. Within the last five years, Jim had previously sold one business asset and incurred a ($3,000) §1231 loss. Jim has not sold any other business assets in any previous years. a. Calculate the recognized gain/loss for each disposition. Organize and complete the §1231 and Capital Gains netting procedures. Show all work and round all numbers to the nearest dollar. §1231 Short-Term Ordinary Long-Term 28% Long-Term 25% Long-Term 0/15/20% b. Complete the table below to indicate the total amount of income from question 4 to be reported in AGI by character. Character of Income Amount Included in AGI Ordinary 25% 28% 0/15/20% Total: you ask Sally and Jim if they sold any assets this year. They provide you with the following: • Sally and Jim have an investment account and report a ($10,000) net short-term capital loss on the sale of stock and a net long-term capital gain of $5,000 on the sale of stock. In addition, the investment account reports they earned $3,500 of qualified dividends. • In December of the current tax year, Sally and Jim sold their home. This home was their primary residence that they had lived in for the last 15 years. They calculated that the gain on the sale of their home was $515,000. ($1,000,000 sales price less $485,000 adjusted tax basis). • Sally and Jim sold a coin collection for $45,000. They had inherited the coin collection in three years ago when a relative passed away and the coin collection had an FMV of $40,000. The relative had originally purchased the coin collection for $35,000 in 2005. • Sally and Jim also sold one of their personal vehicles. They had originally purchased the vehicle in a decade ago for $35,000. They sold it this year for $12,000. • In the current tax year, Sally and Jim sold stock to Sally's sister Kelly for $25,000 (the fair market value). They had originally purchased the stock in 2004 for $27,000. On January 10, 2023 Sally and Jim sold 1,000 shares of XYZ Corp. stock for $50,000. They had originally purchased the stock in 2016 for $51,000. On January 20, 2023 they decided they liked that stock and decide to buy back 250 shares of XYZ Corp. stock for $15,000. • Finally, Jim informs you that he sold two assets used in his business this year. o Jim sold land purchased in 2005 for $200,000 and sold for $225,000 Jim also sold equipment purchased in 2019 for $75,000 with A/D of $75,000 (fully depreciated) and sold for $10,000. Within the last five years, Jim had previously sold one business asset and incurred a ($3,000) §1231 loss. Jim has not sold any other business assets in any previous years. a. Calculate the recognized gain/loss for each disposition. Organize and complete the §1231 and Capital Gains netting procedures. Show all work and round all numbers to the nearest dollar. §1231 Short-Term Ordinary Long-Term 28% Long-Term 25% Long-Term 0/15/20% b. Complete the table below to indicate the total amount of income from question 4 to be reported in AGI by character. Character of Income Amount Included in AGI Ordinary 25% 28% 0/15/20% Total:
Expert Answer:
Answer rating: 100% (QA)
Calculating Recognized GainsLosses and Completing Netting Procedures 1 Organize Assets and Dispositi... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
Students also viewed these law questions
-
On August 25, 2020, Kyle Howard Rittenhouse fatally shot two people, Joseph Rosenbaum and Anthony Huber, and wounded another person, Gaige Grosskreutz, in Kenosha, Wisconsin. The shootings occurred...
-
Read the case study "Southwest Airlines," found in Part 2 of your textbook. Review the "Guide to Case Analysis" found on pp. CA1 - CA11 of your textbook. (This guide follows the last case in the...
-
The Crazy Eddie fraud may appear smaller and gentler than the massive billion-dollar frauds exposed in recent times, such as Bernie Madoffs Ponzi scheme, frauds in the subprime mortgage market, the...
-
Consider Problem 13.28. The solvent MDEA becomes rich in acid gases. To recycle this solvent, it is first heated to 90C in exchanger E-2001 and then sent to the top stage of the stripper T-2002 as...
-
What do you think are the advantages and disadvantages of involving customers this closely in the design process?
-
Shaar (from the previous problem) has revised slightly her estimated earnings growth rate for Rio National and, using normalized (underlying) EPS, which is adjusted for temporary impacts on earnings,...
-
1.11 Peng Plasma Pricing. Peng Plasma is a privately held Chinese business. It specializes in the manufacture of plasma cutting torches. Over the past eight years, it has held the Chinese renminbi...
-
Birkenstock is considering an investment in a nylon-knitting machine. The machine requires an initial investment of $25,000, has a 5-year life, and has no residual value at the end of the 5 years....
-
Question 2 - CASE 2 Nazirul is the owner of Summer Hardware & Electric Sdn Bhd, a family owned business. The store is located in Ampang and has been operating for 30 years. The business consists o...
-
Consider the following fragment of assembly language that is to be executed on a generic three way superscalar processor that can accommodate one memory access per clock. Rewrite the code to improve...
-
Can you elucidate the molecular mechanisms underlying the phenomenon of epigenetic inheritance, particularly in the context of how environmental factors can induce heritable changes in gene...
-
Samson Manufacturing had finished goods inventory of $45,000 on March 1, March cost of goods manufactured of $228,000, and March 31 finished goods of $53,000. Compute the cost of goods sold for the...
-
The following information was obtained from the records of Milena Company fortheyearendedDecember2013: RM Advertising Expense 215,000 InsuranceonFactoryEquipment 8,000 DepreciationofSalesEquipment...
-
Integrity Company is exploring ways to allocate the cost of service departments such as Quality Control and Maintenance to the production departments such as Machining and Assembly. The controller of...
-
Carefully read the case study and identify the strengths and weaknesses (internal) of Boots, and the opportunities and threats (external) it faces... Begin your report by briefly describing what a...
-
PART VII. The following is a partial list of costs incurred last month by the Fontana Company. Product advertising Fire insurance premium for factory Electricity, sales office Lubricating oil for...
-
An employee earns $24 per hour and 1.5 times that rate for all hours in excess of 40 hours per week. Assume that the employee worked 55 hours during the week. Assume further that the social security...
-
If |62x|>9, which of the following is a possible value of x? A. 2 B. 1 C. 0 D. 4 E. 7
-
Bill and Guilda each own 50 percent of the stock of Radiata Corporation, an S corporation. Guilda's basis in her stock is $25,000. On July 31, 2012, Bill sells his stock, with a basis of $40,000, to...
-
Russell (age 50) and Linda (age 45) Long have brought you the following information regarding their income and expenses for the current year. Russell owns and operates a landscaping business called...
-
Karim Depak received a Form 1099-B showing the following stock transactions and basis during 2012: None of the stock is qualified small business stock. Calculate Karim's net capital gain or loss...
-
List three different types of profit figure that you are likely to see in a published profit and loss account.
-
In what ways does a US balance sheet differ from that presented using the UK method of preparation?
-
Repeat the above, reconciling the operating profit and cash statement for the year ended 31 December, year 2.
Study smarter with the SolutionInn App