Answered: REQUIRED: calculate the capital gain or… | bartleby

SWFT Individual Income Taxes

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter16: Property Transactions: Capital Gains And Losses

Section: Chapter Questions

Problem 19P

See similar textbooks

Related questions

Question

Mr. Gaetano has sold a number of assets in
the current year:
An extensive coin collection, which has a
current FMV of $23,500. The total cost of
acquiring the coins is $17,600. There were no
selling costs.
A rare 17th-century manuscript he inherited
from his mother. His mother paid $4,000 for
the manuscript, which had an estimated FMV
of $42,000 at the time of her death. Since
several copies of the same manuscript have
been found (since her death), and so he had
to sell it for $8,500.
A Lawren Harris oil painting that he acquired
for $275,000. The painting sold for $350,000
and the auction house charged a commission
of 20% on the sales price.
REQUIRED: calculate the capital gain or loss
for each. Also, indicate which type of
property this would be considered.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Blurred answer

Similar questions

Given the situations below, which item still has the same basis as when it was purchased? Bob sold his rental property after claiming depreciation. Ebenezer's's father gifted him a car that cost him $25,000. The FMV on the date of the gift was $15,000. Ebenezer sold the car at a loss. Liz Marley acquired a rare stamp as a bequest when her father passed away. A coin is now worth double what Tim paid for it. a. Bob's rental property. b. Ebenezer's car. c. Liz's stamp. d. Tim's coin. For the "kiddie tax" rule to apply, the child must a. Have at least one living parent. b. Not have attained age 23 in the tax year.
Mr. Jackson died on June 19 when the total FMV of his property was $24 million and his debts totaled $2.789 million. His executor paid $23,000 funeral expenses and $172,000 accounting and legal fees to settle the estate. Mr. Jackson bequeathed $500,000 to the First Lutheran Church of Milwaukee and $1 million to Western Wisconsin College. He bequeathed his art collection (FMV $6.4 million) to his wife and the residual of his estate to his three children. Assume the taxable year is 2023. Required: a. Compute Mr. Jackson's taxable estate. b. Compute the estate tax payable by Mr. Jackson's executor if Mr. Jackson made no taxable gifts during his lifetime. c. Compute the estate tax payable by Mr. Jackson's executor if Mr. Jackson made a substantial taxable gift in 2011 and used $5 million of his lifetime transfer tax exclusion to reduce the amount on which gift tax was owed to zero. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs…
Mr. Jackson died on June 19 when the total FMV of his property was $23 million and his debts totaled $2.789 million. His executor paid $23,000 funeral expenses and $172,000 accounting and legal fees to settle the estate. Mr. Jackson bequeathed $500,000 to the First Lutheran Church of Milwaukee and $1 million to Western Wisconsin College. He bequeathed his art collection (FMV $6.4 million) to his wife and the residual of his estate to his three children. Assume that Mr. Jackson made a substantial gift in 2011 and used $5 million of his lifetime transfer tax exclusion to reduce the amount on which gift tax was owed to zero, compute the estate tax payable on Mr. Jackson’s estate. a. $2,766,400 b. $2,366,400 c. $2,966,400 d. $3,482,000
Mr. Jackson died on June 19 when the total FMV of his property was $23 million and his debts totaled $2.789 million. His executor paid $23,000 funeral expenses and $172,000 accounting and legal fees to settle the estate. Mr. Jackson bequeathed $500,000 to the First Lutheran Church of Milwaukee and $1 million to Western Wisconsin College. He bequeathed his art collection (FMV $6.4 million) to his wife and the residual of his estate to his three children. Assume the taxable year is 2021. Required: a. Compute Mr. Jackson's taxable estate. b. Compute the estate tax payable by Mr. Jackson's executor if Mr. Jackson made no taxable gifts during his lifetime. c. Compute the estate tax payable by Mr. Jackson's executor if Mr. Jackson made a substantial taxable gift in 2011 and used $5 million of his lifetime transfer tax exclusion to reduce the amount on which gift tax was owed to zero. Complete this question by entering your answers in the tabs below. Required A Required B Required C Compute…
Mr. Jackson died on June 19 when the total FMV of his property was $23 million and his debts totaled $2.789 million. His executor paid $23,000 funeral expenses and $172,000 accounting and legal fees to settle the estate. Mr. Jackson bequeathed $500,000 to the First Lutheran Church of Milwaukee and $1 million to Western Wisconsin College. He bequeathed his art collection (FMV $6.4 million) to his wife and the residual of his estate to his three children. Assume the taxable year is 2021. Required: a. Compute Mr. Jackson's taxable estate. b. Compute the estate tax payable by Mr. Jackson's executor if Mr. Jackson made no taxable gifts during his lifetime. c. Compute the estate tax payable by Mr. Jackson's executor if Mr. Jackson made a substantial taxable gift in 2011 and used $5 million of his lifetime transfer tax exclusion to reduce the amount on which gift tax was owed to zero. Complete this question by entering your answers in the tabs below. Required A Required B Required C Compute…
Meg O'Brien received a gift of some small-scale jewelry manufacturing equipment that her father had used for personal purposes for many years. Her father originally purchased the equipment for $1,640. Because the equipment is out of production and no longer available, the property is currently worth $5,750. Meg has decided to begin a new jewelry manufacturing trade or business. What is her depreciable basis for depreciating the equipment?
Last year, Jose and Josefina Munoz bought a home with a dwelling replacement value of $250,000 and insured it (via an HO-5 policy) for $225,000. The policy reimburses actual cash value and has a $500 deductible, standard limits for coverage C items, and no scheduled property. Recently, burglars broke into the house and stole a new computer with a current replacement value of $1,500 and an estimated useful life of three years. They also took jewelry valued at $2,500 and a coin collection valued at $1,500. If the Munozs’ policy has a 90 percent co-insurance clause, do they have enough insurance? Assuming a 50 percent coverage C limit, calculate how much the Munoz family would receive if they filed a claim for the stolen items. What advice would you give the Munoz family about their homeowner’s coverage?
When Alex Trebeck died, the total FMV of his property was $125 million and his debts totaled $5 million. His executor paid $500,000 of funeral expenses and $1,500,000 of accounting and legal fees to settle the estate. Mr. Trebeck bequeathed $10 million to Cornell University, $5 million to his church, and left $35 million to his surviving spouse. He left the remainder of his estate to his children. Compute Mr. Trebeck's taxable estate. (Enter your answer as an exact number - do not use the word "millions")
Mrs. V paid the following expenditures in the current year. Interest on line of credit ($20,000 outstanding for the entire year) $1,000 Investment management fees for her registered retirement savings plan 6,000 Investment management fees for her non-registered investments 800 Legal fees related to the acquisition of a rental property 1,200 The line of credit is mostly for the purchase of non-registered investments, made several years ago. All of the investments are still owned. However, $5,000 of the total outstanding principal was used to renovate her home last year. The rental property was purchased late in the year. No rental income was received in the year. What is the total amount that she can deduct on her personal income tax return for the current year, in respect of these expenditures? A. 1,550 B. 1,800 C. 2,750 D. 3,000
Gwen sold some equipment for $10,250 in cash, $1,000 of marketable securities, the buyer assumption of her $1,500 loan and incurred selling expenses of $500. She had purchased the equipment several years ago for $22,000. On November 10th of the current year, the computer was worth $11,50O. If $11,500 of depreciation deductions had been taken, answer the following questions. a. What is the Gwen's amount realized in the transaction? b. What is Gwen's adjusted basis in the equipment? c. What is Gwen's recognized gain or loss? d. How is Gwen's gain taxed?
Timmy paid $800,000 cash for all of the assets of Bob’s Chicken Fried Steak Shack, Inc. (Bob’s). Timmy did not buy the stock of Bob’s; rather he bought all of Bob’s assets from Bob’s. Here is a list of the physical assets that Timmy got for his $800,000, showing the stand-alone FMV of each category:*** Land & Building, $350,000 Furniture & Equipment, $160,000 Inventory, $15,000 Bob’s latest property tax appraisal from Dallas County showed the land value at $150,000, the building at $100,000, the furniture and equipment at $75,000. What is Timmy’s depreciable basis in the building? What is Timmy’s depreciable basis in the furniture and equipment? What amount will Timmy eventually record as COGS with respect to the purchased inventory? How much, if any, goodwill did Timmy purchase? Address each item separately. (Each part must be correctly answered to earn a point for this item (3).) *** These FMVs are as agreed and stated in the negotiated Purchase Agreement.
Montgomery has decided to engage in wealth planning and has listed the value of his assets below. The life insurance has a cash surrender value of $154,000, and the proceeds are payable to Montgomery’s estate. The Walen Trust is an irrevocable trust created by Montgomery’s brother 10 years ago and contains assets currently valued at $800,000. The income from the trust is payable to Montgomery’s faithful butler, Walen, for his life, and the remainder is payable to Montgomery or his estate. Walen is currently 37 years old, and the §7520 interest rate is currently 5.4 percent. Montgomery is unmarried and plans to leave all his assets to his surviving relatives. (Refer to Exhibit 25-1, Exhibit 25-2 and Exhibit 25-4.) Property Value Adjusted Basis Auto $ 37,000 $ 72,000 Personal effects 92,000 127,000 Checking and savings accounts 284,000 284,000 Investments 2,585,000 855,000 Residence 1,485,000 1,065,000 Life insurance proceeds 1,085,000 84,000 Real estate investments…

SEE MORE QUESTIONS

Recommended textbooks for you

SWFT Individual Income Taxes

SWFT Individual Income Taxes

Accounting

ISBN:

9780357391365

Author:

YOUNG

Publisher:

Cengage

SWFT Individual Income Taxes

SWFT Individual Income Taxes

Accounting

ISBN:

9780357391365

Author:

YOUNG

Publisher:

Cengage

SEE MORE TEXTBOOKS