Individual Income Taxes
43rd Edition
ISBN: 9780357109731
Author: Hoffman
Publisher: CENGAGE LEARNING - CONSIGNMENT
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 20, Problem 17DQ
To determine
Describe whether is it possible to recognize gain on the appreciated value of the land to offset losses from other sources, considering the rules of § 351.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Suppose Mr. Asib want to start a business in your local community.
How much will be Mr. Asib's Start-up capital, second stage, and acquisition capital? How would you fund each capital amount? In which areas will mr. asib utilize this capital? Explain with justification.
Janine is currently in need of cash and plans to sell some of his capital assets.
Which of the following would be subject to the capital gains tax if sold?
a. ornamental plants
b. patent
c. grazing field
d. smartphone
TP has an investment in two parcels of vacant land. Parcel 1 is a capital asset and parcel 2 is a § 1231 asset. TP already has a short-term capital loss for the year that he would like to offset with capital gain. He has a § 1231 lookback loss that exceeds the gain from the disposition of either land parcel. TP wants to sell only one land parcel: each of them would yield the same amount of gain. The gain that would be recognized exceeds the short-term capital loss TP already has. Which of the following statements is correct?
Group of answer choices
A)TP will have a net capital loss no matter which land parcel he sells.
B)TP will have a net capital loss if he sells parcel 2.
C)TP will have a net capital loss if he sells parcel 1.
D)TP will have a net capital gain if he sells either parcel 1 or parcel 2
E)None of these
Chapter 20 Solutions
Individual Income Taxes
Ch. 20 - Prob. 1DQCh. 20 - LO.1 Sylvia and Trang want to enter into business...Ch. 20 - Prob. 3DQCh. 20 - Prob. 4DQCh. 20 - Prob. 5DQCh. 20 - LO.3, 4, 5 Contrast the income taxation of...Ch. 20 - LO.3, 8, 9 The taxpayer has generated excess...Ch. 20 - Prob. 8DQCh. 20 - Prob. 9DQCh. 20 - Prob. 10DQ
Ch. 20 - Prob. 11DQCh. 20 - Prob. 12DQCh. 20 - Prob. 13DQCh. 20 - Prob. 14DQCh. 20 - LO.5 Beige Corporation has a fiscal year ending...Ch. 20 - Prob. 16DQCh. 20 - Prob. 17DQCh. 20 - Prob. 18DQCh. 20 - Prob. 19DQCh. 20 - Prob. 20DQCh. 20 - Prob. 21DQCh. 20 - Blaine, Cassie, and Kirstin are equal partners in...Ch. 20 - LO.3 Green Corporation, a calendar year taxpayer,...Ch. 20 - Prob. 24CECh. 20 - Prob. 25CECh. 20 - LO.4 Gold and Silver are two unrelated calendar...Ch. 20 - Prob. 27CECh. 20 - Prob. 28CECh. 20 - Prob. 29CECh. 20 - Prob. 30CECh. 20 - Prob. 31CECh. 20 - Prob. 32CECh. 20 - Prob. 33CECh. 20 - LO.3, 4, 5 Using the legend provided below,...Ch. 20 - LO.3 Garnet incurs the following capital asset...Ch. 20 - Prob. 36PCh. 20 - LO.3 Taupe, a calendar year taxpayer, has a...Ch. 20 - LO.3, 8 Robin incurred the following capital...Ch. 20 - Prob. 39PCh. 20 - Prob. 40PCh. 20 - Prob. 41PCh. 20 - Prob. 42PCh. 20 - Prob. 43PCh. 20 - Prob. 44PCh. 20 - Prob. 45PCh. 20 - Prob. 46PCh. 20 - Prob. 47PCh. 20 - Prob. 48PCh. 20 - Prob. 49PCh. 20 - Prob. 50PCh. 20 - During the current year, Thrasher (a calendar...Ch. 20 - Prob. 52PCh. 20 - Prob. 53PCh. 20 - Prob. 54PCh. 20 - Prob. 55PCh. 20 - LO.9 The Pheasant Partnership reported the...Ch. 20 - Prob. 57PCh. 20 - Prob. 58PCh. 20 - Prob. 59PCh. 20 - Prob. 1RPCh. 20 - Prob. 2RPCh. 20 - Prob. 3RPCh. 20 - Prob. 5RPCh. 20 - On January 1, year 5, Olinto Corp., an accrual...Ch. 20 - Prob. 2CPACh. 20 - Prob. 3CPACh. 20 - Prob. 4CPACh. 20 - Prob. 5CPACh. 20 - Prob. 6CPACh. 20 - Prob. 7CPA
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Which of the following sale for insufficient consideration is not subject to donor's tax?arrow_forwardYou and your father have decided to start a business dealing with mining supplies and have prepared a detailed business plan and finalised company incorporation documents. Following this, you carried out a feasibility study to ascertain whether the venture would be viable. You and your father jointly decided to cease the project due to a lack of funds and viability, but not before you incurred a $10,000 feasibility cost. Required: Would any income or deductions be permitted for tax purposes? Briefly discuss.arrow_forwardSix years ago, Donna purchased land as an investment. The land cost $150,000 and is now worth $480,000. Donna plans to transfer the land to Development Corporation, which will subdivide it and sell individual tracts. Development's income on the land sales will be ordinary in character. Read the requirements. Requirement a. What are the tax consequences of the asset transfer and land sales if Donna contributes the land to Development in exchange for all its stock? on the transfer of land to Development Corporation. Donna recognizes no gain or loss Development's basis in the land will be $ 150,000. All gain on the subsequent sales will be to Development. This alternative results in the pre-contribution gain post-contribution profit earned from subdividing the land ordinary income that accrued prior to Donna's transfer and the being taxed at a 21% tax rate. Requirement b. In what alternative ways can the transaction be structured to achieve more favorable tax results? Assume Donna's…arrow_forward
- Assume that you’ve just inherited $100,000 and wish to use all or part of it to make a real estate investment. Would you invest directly in real estate, or indirectly through something like a REIT? Explain. Assuming that you decided to invest directly, would you invest in income-producing property or speculative property? Why? Describe the key characteristics of the types of income producing or speculative property you would seek. What financial and nonfinancial goals would you establish before beginning the search for suitable property? If you decide to invest in real estate indirectly, which type(s) of securities would you buy, and why?arrow_forwardWhilst searching for related literatures for her thesis study, Jackie found a tax law which provides that proceeds from the collection of taxes are to be used to rehabilitate a private organization under financial stress. This clearly violates what constitutional right? a. right to just compensation b. right to due process c. right against self-incrimination d. right to equal protection of the lawarrow_forwardThe private property of Mina will be affected by the upcoming road improvement in their barangay. Hence, the government will take over the property. Can Mina disagree with this action of the government? * A. Yes. Since it is a private property and Mina is the rightful owner such property, she has the right to disagree and keep the property under her name. B. No. The government has the power to take private property provided that it is used for public purposearrow_forward
- What would cause the rate of return for an investor that purchases real estate and leases it to the corporation to differ from the rate of return earned by the corporation on the incremental investment in owning versus leasing the same property?arrow_forward1. According to the article by Tony Dimitriadis (see Supplementary Study Materials Folder), whether an amount received by a taxpayer following the sale of a capital asset (e.g. real estate) will be treated as capital or income depends largely on: Select one: The intention of the taxpayer when the property was first acquired The degree of renovation and development carried out on the property Whether the taxpayer held on to the property, rather than making a short term profit Whether the taxpayer is an individual or a business taxpayer All of the above are important considerations 2. Select the INCORRECT statement from the following options: Select one: The Cost Base of Personal Use Assets excludes Element 3 expenses (Ownership Costs) An antique vase bought at a garage sale for $200 and sold for $20,000 is exempt from CGT The indexation rate for assets acquired on 2 February 1986 was 41.4 All costs incurred under Element 3 (Ownership Costs) should be included in the indexation…arrow_forwardWhat is the appropriate term for how the company distributes a portion of its profits? How does this benefit the local community? What is the benefit to the company and local community by this action?arrow_forward
- 3. Randall operates his distribution business in several countries. He wants to move some equipment to a new corporation with an office in South Africa. This equipment includes assets with a large acquisition price and accumulated MACRS depreciation. The assets to be transferred would generate a $1,000,000 realized gain if sold. Advise Randall on the tax effects of his proposed asset transfer.arrow_forwardWhich of the following statements best describes the minimum standard for active participation in a real estate investment? A) The taxpayer must have at least 10% of her net worth invested in the real estate. B) The standard is identical to the material participation standard. C) The taxpayer must be involved in the management of the property in a bona fide manner. D) It must be the taxpayer’s primary trade or business.arrow_forwardWhich of the following statements is correct? When depreciable property is gifted to another individual taxpayer, the depreciation recapture potential is extinguished. When depreciable property is inherited by a taxpayer, the depreciation recapture potential is extinguished. When corporate depreciable property is distributed as a dividend, the depreciation recapture potential is generally not recognized. When depreciable property is contributed to charity, the depreciation recapture potential has no effect on the amount of the charitable contribution deduction. All of the above are correct.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT
Individual Income Taxes
Accounting
ISBN:9780357109731
Author:Hoffman
Publisher:CENGAGE LEARNING - CONSIGNMENT