1.Lowes Company sold a machine to a dealer for $25,000. Lowes bought the machine for $55,000 and has claimed $15,000 of depreciation expense on the machine. What gain or loss does Lowes realize on the transaction?
2. Elizabeth has recently retired and now wants to pursue her life-long dream of owning a sailboat. To come up with the necessary cash, she sells the following investments:
|
Stock
|
Market Value
|
Basis
|
Holding Period
|
|
Bradbury
|
$ 40,000
|
$ 5,000
|
Short-term
|
|
Zappos
|
$ 20,000
|
$ 30,000
|
Short-term
|
|
Longhorn Tech
|
$ 20,000
|
$ 12,000
|
Long-term
|
|
Stanley Corp.
|
$ 17,000
|
$ 28,000
|
Long-term
|
What is Elizabeth's net capital gain/loss for the year?
3. Jonathan and Dianna are a married couple and have the following capital stock transactions during the year. What is the couple's net capital gain/loss for the year?
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Capital Gain/Loss
|
Amount
|
|
Short-term capital gain
|
$ 9,000
|
|
Long-term capital loss
|
6,000
|
|
Short-term capital loss
|
2,000
|
|
Long-term capital gain
|
15,000
|
4. For 2014, Joey has a short-term loss of $2,500 and a long-term loss of $4,750.
a. How much loss can Joey deduct in 2014?
b. How much loss will Joey carryover to 2015, and what is the character of the loss carryover?