d for $200,000 in 2015. In 2016, the land\'s value increases to $240,000. In 201
ID: 2556605 • Letter: D
Question
d for $200,000 in 2015. In 2016, the land's value increases to $240,000. In 2017, Robert purchased lan Robert sells the land for $300,000 1. What is Robert's realized and recognized income in 2016 a. $40, 000 realized income based on the value of the land increase in 2016 and $0 recognized gain because Robert did not sell the land in 2016. $40,000 realized income based on the value of the land increase in 2016 and $40,000 recognized gain because the real estate went up in value by that amount in 2016 and it does not matter that Robert did not sell the real estate until 2017 $O realized income regardless of the fact that the land increased in 2016 and $o recognized gain because Robert did not sell the land in 2016 None of the above b. c. d. 2. What is Robert's realized and recognized income in 2017 when Robert sold the land $60,000 realized and $60,000 recognized $60,000 realized and $100,000 recognized a. b. c. d. $100,000 realized and $100,000 recognized None of the above Rachel owned 400 shares of ALMOND company which she purchased for $2,000 in June of 2016, At the end of 2016 her 400 shares of ALMOND stock was worth $2,400. In 2017 she sold the stock for $3,000 3. For 2016 how much gain did Rachel realize in 2016? a. $400 b. $0 c. $2400 d. None of the above For 2016 how much gross income for tax reporting purposes will Rachel have to include on her 2016 Federal tax return?: 4. a. $400 b. $0 c. $2400 d. None of the above 5. For 2017 how much gross income must Rachel report of her 2017 Federal tax return? a. $3,000 b. $1,000 c. $600 6. For 2017, upon the sale of ALMOND stock, what was the amount of Rachel's return of capital? b. c. d. $400 the amount the ALMOND stock went up in 2016 $2,000 her original purchase price of her ALMOND stock None of the above Page 1Explanation / Answer
1. c. There is no realised or recognised gain, since the property was not sold in 2016.
2. c. $100,000 realized gain and $100,000 recognised gain. Since there was no revaluation done, and no recorded cost mentioned, entire amount of profit is realised and recognised income.
3. b. $0. Since she didnt sell the shares, there was $0 realised gain.
4. b. $0 Tax is only paid on the gained earned from the sale of the shares. Since the shares were sold in 2017, rachel is notliable for any tax.
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