Test: Federal Tax
An individual taxpayer received a valuable painting from his uncle, a famous painter. The painter created the painting. After the taxpayer held the painting for six months, he sold it for a $400,000 gain. The gain is a short-term capital gain. a. True
b. False
Gabriel has the following capital gains and losses for 2014: $6,000 STCL, $5,000 28% gain, $2,000 25% gain, and $6,000 0%/15%/20% gain. Which of the following is correct:
a. The net capital gain is composed of $5,000 28% gain and $2,000 0%/15%/20% gain.
b. The net capital gain is composed of $1,000 28% gain and $6,000 0%/15%/20% gain.
c. The net capital gain is composed of $1,000 25% gain and $6,000 0%/15%/20% gain.
d. The net capital gain is composed of $3,000 28% gain, $2,000 25% gain, and $2,000 0%/15%/20% gain.
e. None of these choices are correct.
Herald is in the business of song writing. He writes jingles for television advertisements. He writes a jingle and sells it for a lump sum plus a royalty each time the jingle is played on TV. He has:
a. sold an ordinary asset.
b. an ordinary gain.
c. "sold an ordinary asset" and "an ordinary gain".
d. no gain or loss.
e. sold a capital asset.
Incorrect. Since Herald is in the business of writing songs, the jingle is an ordinary asset and he has ordinary gain from its sale.
Herald is in the business of song writing. He writes jingles for television advertisements. He writes a jingle and sells it for a lump sum plus a royalty each time the jingle is played on TV. He has:
a. sold an ordinary asset.
b. an ordinary gain.
c. "sold an ordinary asset" and "an ordinary gain".
d. no gain or loss.
e. sold a capital asset.
In 2013, Maureen had a $12,000 net short-term capital loss and deducted $3,000 as a capital loss deduction. In 2014, Maureen has a $16,000 0%/15%/20% long-term capital gain and no other capital gain or loss transactions. Which of the statements below is correct?
a. Maureen has a 2014 $7,000 net capital gain.
b.
b. False
Gabriel has the following capital gains and losses for 2014: $6,000 STCL, $5,000 28% gain, $2,000 25% gain, and $6,000 0%/15%/20% gain. Which of the following is correct:
a. The net capital gain is composed of $5,000 28% gain and $2,000 0%/15%/20% gain.
b. The net capital gain is composed of $1,000 28% gain and $6,000 0%/15%/20% gain.
c. The net capital gain is composed of $1,000 25% gain and $6,000 0%/15%/20% gain.
d. The net capital gain is composed of $3,000 28% gain, $2,000 25% gain, and $2,000 0%/15%/20% gain.
e. None of these choices are correct.
Herald is in the business of song writing. He writes jingles for television advertisements. He writes a jingle and sells it for a lump sum plus a royalty each time the jingle is played on TV. He has:
a. sold an ordinary asset.
b. an ordinary gain.
c. "sold an ordinary asset" and "an ordinary gain".
d. no gain or loss.
e. sold a capital asset.
Incorrect. Since Herald is in the business of writing songs, the jingle is an ordinary asset and he has ordinary gain from its sale.
Herald is in the business of song writing. He writes jingles for television advertisements. He writes a jingle and sells it for a lump sum plus a royalty each time the jingle is played on TV. He has:
a. sold an ordinary asset.
b. an ordinary gain.
c. "sold an ordinary asset" and "an ordinary gain".
d. no gain or loss.
e. sold a capital asset.
In 2013, Maureen had a $12,000 net short-term capital loss and deducted $3,000 as a capital loss deduction. In 2014, Maureen has a $16,000 0%/15%/20% long-term capital gain and no other capital gain or loss transactions. Which of the statements below is correct?
a. Maureen has a 2014 $7,000 net capital gain.
b.