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Exam 16: Property Transactions: Capital Gains and Losses

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Question 51

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Hilda lent $2,000 to a close personal friend to help the friend avoid overdrawing the friend's checking account.The friend was supposed to repay the $2,000 within a month.Instead, the friend declared personal bankruptcy and Hilda will never recover any of the $2,000.What are the tax implications of these events for Hilda?

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Assuming that Hilda is not in the trade ...

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Question 52

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For tax purposes, there is no original issue discount on a bond unless the bond is issued for less than its face value and the difference between the face value and the bond issue price is at least one-fourth of 1% of the redemption price at maturity multiplied by the number of years to maturity.

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Question 53

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Martha is unmarried with one dependent and files as head of household.She had 2019 taxable income of $45,000, which included $16,000 of 0%/15%/20% net long-term capital gain.What is her tax on taxable income using the alternative tax on net long-term capital gain method?

Carol had the following transactions during 2019: a painting held for two years and sold at a gain of $85,000? 100 shares of Gray stock held six months and sold for a loss of $6,000? 50 shares of Yellow stock held 18 months and sold for a gain of $36,000.Carol also had $264,000 of taxable income from other sources than these property transactions.What is Carol's net capital gain or loss and what is her taxable income?

Janet received stock worth $4,000 at the time it was gifted to her by her father.He had acquired the stock several years earlier for $2,200.He paid no gift tax on the transfer to Janet.Janet sells the stock for $6,600 two months after receiving it.What are the nature and amount of Janet's gain or loss?

The possible holding periods for capital assets include:

Ranja acquires $200,000 face value corporate bonds for $186,000 when the bonds are issued.He holds the bonds as an investment for two years and then sells them for $198,000.He amortizes $2,000 of the OID.What tax issues does Ranja have with respect to these bonds?