Federal Income Taxation

Federal Income Taxation HW#12
Name
Course
Instructor
Date
Chapter 14
Please answer the following questions at the end of Chapter 14:
#'s 1, 2, 9, 15, 20, & 32-33
1 LO.2, 4, 5 Sheila inherited 300 shares of stock, 100 shares of Magenta, and 200 shares of Purple. She has a stockbroker sell the shares for her, uses the proceeds for personal expenses, and think nothing further about the transactions. What issues does she face when she prepares her Federal income tax return?
Sheila needs to consider the cost basis of inherited stock since selling the stock triggers a tax transaction. Sheila inherited the store, and sales proceeds need to be included in 1099-B. The gross proceeds will be the 300 shares multiplied by the share price, and she will be taxed on. The cost basis is the fair market value when the time of death or when the assets are transferred. The IRS also provides that if the value of the asset value drops after inheritance, one can consider a valuation date of six months after the date of death.
 2 LO.2 An individual taxpayer sells some used assets at a garage sale. Why are none of the proceeds taxable in most situations?
These assets are personal-use or business-use assets, and losses on personal-use investments are not deductible. The sale proceeds are adjusted based on the return of capital, and the transactions are not taxable.
9 LO.5 After netting all of her short-term and long-term capital gains and losses, Misty has a net short-term capital loss and a net long-term capital loss. Can she earn these against each other? Why or why not?
No, she should not net short-term and long-term and losses against each other. First, short-term gains and l...