1)Valerie has an AGI of $75,000 without considering the sale of a nondepreciable
ID: 2497656 • Letter: 1
Question
1)Valerie has an AGI of $75,000 without considering the sale of a nondepreciableasset for
$15,000. The asset was acquired six years ago and has an adjusted basis of$28,000.
She has no other sales or exchanges.
Requirement
Determine her AGI for the following independent situations when the asset is:
a. A capital asset.
b. Sec. 1231 property.
2)
Consider the following summary of Sec. 1231 gains and losses recognized byJasmine during the period
2010 -2015.
Jasmine had no nonrecaptured Sec. 1231 losses at the beginning of 2010.
DATA TABLE
Sec. 1231 Gains Sec. 1231 Losses
2010 $9,600 $6,500
2011 21,000 25,500
2012 18,000 26,300
2013 9,700 4,400
2014 25,700 13,900
2015 15,000 21,300
Requirement
If Jasmine has no capital gains and losses during the six-year period, determine her net capital gain for each year.
Determine the Sec. 1231 gain or loss for each year and enter the amount(s) in the appropriate type of income column. Note that you can enter more than one amount for each year. (If a box is not used in the table leave the box empty; do no enter a zero. Abbreviations used; NLTCG = net long-term capital gain, NLTCL = net long-term capital loss.)
Explanation / Answer
Answer:
A. A Capital Assets : Capital asset include most investment properties and personal use assets. They exclude inventory, real and depreciable property used in a trade or business.
Capital Asset condition AGI is $ 75,000 ,Can not Include assets
B. Sec, 1231 Asset
AGI is $ 75,000 + $ 28,000 = AGI $ 103,000
Calculation of Net Capital Gain for each year
Year Gain Losses Net Capital Gain / Losses( Gain - Losses)
2010 $ 9600 $ 6500 ( $ 9600 - 6500 ) = $ 3,100 Gain
2011 $ 21,000 $ 25,500 ( $ 21,000 - $ 25,500 ) = - $ 4,500 Losses
2012 $ 18,000 $ 26,300 ( $ 18,000 - $ 26,300 ) = - $ 8,300 Losses
2013 $ 9,700 $ 4,400 ( $ 9,700 - $ 4,400 ) = $ 5,300 Gain
2014 $ 25,700 $ 13,900 ( $ 25,700 - $ 13,900 ) = $ 11,800 Gain
2015 $ 15,000 $ 21,300 ( $ 15,000 - $ 21,000 ) = $ 6,000 Losses
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