Hannah Tywin owns 100 shares of MM Inc. stock. Shesells the stock on December 11 for $25 per share. Shereceived the stock as a gift from her Aunt Pam on March20 of this year when the fair market value of the stockwas $18 per share. Aunt Pam originally purchased thestock seven years ago at a price of $12 per share.What is the amount and character of Hannah'srecognized gain or loss on the stock?

To determine the amount and character of Hannah Tywin's recognized gain or loss on the sale of the…

Answered: Hannah Tywin owns 100 shares of MM Inc.…

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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Mac’s 24-year-old daughter, Alana, is a full-time student. In 2018, Mac gives Alana 600 shares of Highgrowth stock. Mac purchased the stock 10 months ago at $20 per share. On the gift date, the stock is worth $35 per share. After the gift, Highgrowth declares and pays a $170 dividend to Alana. The next month, Alana sells her 600 shares for $38 per share. Mac and Alana are in the 32 and 12 percent marginal tax brackets for ordinary income and in the 15 and 0 percent tax brackets for dividend income, respectively. a. How much must Alana and Mac include in gross income in 2018? b. What family tax savings are achieved through this gift? (Round answer to 2 decimal places, e.g. 52.75.)
Stock owned by a brother is sold to his sister. The brother's adjusted basis of the stock is $22,000. He sells the stock for $19,000. The sister sells the stock to an unrelated party for $17,000. What is the gain recognized by the sister? a. Her basis is $17,000. The price she paid for it. She sold it for $19,000. She recognizes a gain of $2,000. b. Because of the situation, she only has a $1,000 recognized loss. c. She takes the brother's basis in the stock and recognizes the $1,000 gain. d. None of the answers provided are correct.
Penny owns 501 shares of Mack Co. They have an adjusted cost base of $15.6 per share. On March 31, 2020, Penny sold all of her shares for $13.21 per share. After she sold the shares, the price fell further and on April 15, 2020, Penny purchased 263 of the same class of shares of Mack Co. for $10.67 per share. She was still holding all of the shares at the end of 2020. What is the adjusted cost base of the Mack Co shares Penny holds at the end of 2020?
Jack, the sole shareholder of Rettig Corporation, sold his stock to Jill on July 1 of this year for $80,000. Jack's stock basis at the beginning of the year was $50,000. Rettig made a $20,000 cash distribution to Jack immediately before the sale, while Jill received a $40,000 cash distribution from Rettig on November 1. As of the beginning of the current year, Rettig had $12,000 in accumulated E & P, while current E & P (before distributions) was $15,000. What is the character of Jack's distribution (amount of dividend, return of capital, capital gain)? What is the character of Jill's distribution (amount of dividend, return of capital, capital gain)? What is Jack's recognized gain on the sale of his stock?
V1.
Abby purchased 100 shares of her father’s favorite stock for $27 per share exactly 1 year ago, commission free. She sold it today for a total amount of $3275. She plans to invest the entire amount in a different corporation’s stock today, but she must now pay a $45 commission fee. If she plans to sell this new stock exactly 1 year from now and realize the same return as she has just made, what must be the total amount she receives next year? Include the commission fee as a part of the purchase price, but neglect any tax effects. The total amount that she receives next year is?
On January 1, year 1, Dave received 1,000 shares of restricted stock from his employer, RRK Corporation. On that date, the stock price was $7 per share. Dave's restricted shares will vest at the end of year 2. He Intends to hold the shares until the end of year 4, when he intends to sell them to help fund the purchase of a new home. Dave predicts the share price of RRK will be $30 per share when his shares vest and will be $40 per share when he sells them. Note: Leave no answer blank. Enter zero if applicable. Input all amounts as positive values. Required: a. If Dave's stock price predictions are correct, what are the taxes due on these transactions to Dave if his ordinary marginal rate is 32 percent and his long-term capital gains rate is 15 percent? b. If Dave's stock price predictions are correct, what are the tax consequences of these transactions to RRK? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required A…
Jane Ramos owned stock with a cost of $200,000. The stock has a market value on Jane's date of death of $375,000. The stock was willed to Jane's niece Jenny. Which of the following is true? a. Jenny's basis is $200,000; the stock's value in the gross estate is $100,000. b. Jenny's basis is $375,000; the stock's value in the gross estate is $100,000. c. Jenny's basis is $200,000; the stock's value in the gross estate is $375,000. d. Jenny's basis is $375,000; the stock's value in the gross estate is $375,000.
Kathy Myers frequently purchases stocks and bonds, but she is uncertain how to determine the rate of return that she is earning. For example, three years ago she paid $27,000 for 1,010 shares of Malti Company's common stock. She received a $879 cash dividend on the stock at the end of each year for three years. At the end of three years, she sold the stock for $25,000. Kathy would like to earn a return of at least 7% on all of her investments. She is not sure whether the Malti Company stock provide a 7% return and would like some help with the necessary computations. Required: Compute the net present value that Kathy earned on her investment in Malti Company stock. Did the Malti Company stock provide a 7% return?
Dahlia is in the 32 percent tax rate bracket and has purchased the following shares of Microsoft common stock (Nasdaq: MSFT) over the years: Date Purchased Shares 560 460 660 410 7/10/2013 4/20/2014 1/29/2015 11/02/2017 If Dahlia sells 1,280 shares of Microsoft for $84,480 on December 20, 2023, what is her capital gain or loss in each of the following assumptions? Note: Do not round intermediate calculations. a. She uses the FIFO method. Basis $ 25,760 23,828 26,136 18,532 Capital gain ✓$ 193,556 X
Anne owns 300 shares of Davenport Co. She acquire the shares three years ago. her adjusted basis in the shares is 10,000 and their fair market value is $20,00. In July she received stock rights worth $4,000. She sold the rights in September for $5,000. Her gain or loss on the rights of sale is?

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