Answered: 1. Martha has a net capital loss of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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1. Martha has a net capital loss of $17,000 and other ordinary taxable income of $45,000 for the current year. What is the amount of Martha's capital loss carryforward?

a.$17,000

b.$0

c.$14,000

d.$10,000

e.None of these choices are correct.

2. Jerry bought his home 15 years ago for $60,000. Three years ago, Jerry married Debbie and she moved into the same house and has lived there since. If they sell Jerry's house in the current year for $340,000, what is their taxable gain on a joint tax return?

a.$0

b.$30,000

c.$155,000

d.$280,000

3. Which of the following is a capital asset?

a.A literary work held by the author

b.A taxpayer's principle residence

c.Real estate held by a developer

d.A truck used in a taxpayer's business

e.None of these choices are correct.

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