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Upon the sale or other disposition of property...

Upon the sale or other disposition of property...

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Author: Patricia Rhone
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Upon the sale or other disposition of property, what four questions should be considered for income tax purposes?

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Upon the sale or other disposition of property, what four questions should be considered for income tax purposes?
South-western Federal Taxation 2016 (chapter 14, pp. 2). (2015). Cengage Learning
 
4. If a taxpayer sells property for cash, the amount realized consists of the net proceeds from the sale. For each of the following, indicate the effect on the amount realized:
a. The property is sold on credit.
b. A mortgage on the property is assumed by buyer.
c. A mortgage on the property is assumed by the seller.
d. The buyer acquires the property subject to a mortgage of the seller.
e. Stock that has a basis to the purchaser of $6,000 and a fair market value of $10,000 is received by the seller as part of the consideration.
South-western Federal Taxation 2016 (chapter 14, pp. 2-5). (2015). Cengage Learning
 
2. Distinguish between a loss that is not recognized on a nontaxable exchange and a loss that is not recognized on the sale or exchange of a personal use asset.
South-western Federal Taxation 2016 (chapter 15, pp. 2-3). (2015). Cengage Learning
 
3. Karla exchanges personal use property for property to be held for productive use in her business. Can this transaction qualify for like-kind exchange treatment? Explain
South-western Federal Taxation 2016 (chapter 15, pp. 3-5). (2015). Cengage Learning
 
1. Sheila inherited 300 shares of stock, 100 shares of Magenta and 200 shares of Purple. She as a stockbroker sell the shares for her, uses proceeds for personal expenses, and thinks nothing further about the transaction. What issues does she face when she prepares her federal income tax return?
South-western Federal Taxation 2016 (chapter 16, pp. 17-19). (2015). Cengage Learning
 
26. Melaney has had a bad year with her investments. She lent a friend $8,000; the friend did not repay the loan when tit was due and then declared bankruptcy. The loan is totally uncollectible. Melaney also was notified by her broker that Oak corporate bonds she owned became worthless on October 13, 2015. She had purchased the bonds for $22,000 on November 10, 2014. Melaney also had a $60,000 loss on the disposition of 1244 corporate stock that she purchased several years ago. Melaney is single.
a. What are the nature and amount of Melaney’s losses?
b. What is Melaney’s AGI for 2015 assuming that she has $65,000 of ordinary gross income from sources other than those discussed?
c. What are the nature and amount of Melaney’s loss carryforwards?
South-western Federal Taxation 2016 (chapter 16, pp. 20-24). (2015). Cengage Learning
 
1. Harriet, an organic farmer, has owned depreciable farm equipment for several years. Is the equipment a capital asset? Why or why not?
South-western Federal Taxation 2016 (chapter 17, pp. 4-5). (2015). Cengage Learning
3. Bernice, a sole proprietor, sold two business assets during the year result. As a result, she has an ordinary loss and a 1231 gain. The loss asset was office furniture that was held for eight months, and the gain asset is land that was held for five years. Whey doesn’t the ordinary loss offset the 1231 gain?
South-western Federal Taxation 2016 (chapter 17, pp. 4). (2015). Cengage Learning


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