Chapter 7, Chapter 9
Quiz yourself by thinking what should be in
each of the black spaces below before clicking
on it to display the answer.
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| show | Losses from portfolio investments are deductible in full against ordinary income.
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| Which of the following types of investments generate interest income? (Check all that apply.) | show 🗑
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| Which of the following statements is correct? | show 🗑
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| show | Long-term capital gains
Qualified dividends
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| Brent, a single taxpayer, has a 24% marginal tax rate. He is considering an investment that will earn qualified dividends at a rate of 7% before tax. What is Brent's after-tax rate of return on the securities? | show 🗑
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| Which of the following types of income is generated from passive investments rather than portfolio investments? | show 🗑
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| Which of the following types of investments generate dividend income? (Check all that apply.) | show 🗑
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| show | 1. Julian's $2,500
2. Omar's $2,500
3. Qi's $3,000
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| show | The income may be taxed as low as 0%, depending on the taxpayer's ordinary income rate.
The income may be taxed at a rate as high as 20%, depending on the taxpayer's taxable income.
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| Bailey has $8,000 to invest. She has a 24% marginal tax rate and is planning to reinvest her dividends and leave the investment in place for three years. If she can invest the money in taxable securities that earn qualified dividends with a 6% rate of ret | show 🗑
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| show | False
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| True or false: Interest income is generally taxed at lower capital gains rates. | show 🗑
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| Regarding portfolio investments, _____ dividends generally are taxed at capital gains rates and _____ dividends are taxed at ordinary rates. | show 🗑
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| show | The tax basis includes costs to substantially improve the asset.
The tax basis includes the original cost (or other basis) in the asset.
The tax basis includes costs incurred in preparing the asset for initial use.
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| show | has maintained sufficient records to document which batch of stock is being sold
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| Which one of the following tax rates does NOT currently apply to long-term capital gains? | show 🗑
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| Assets that are held for investment or personal use assets are referred to as __________ assets. (Enter only one word per blank.) | show 🗑
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| show | Unrecaptured Section 1250 gain from the sale of business property
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| show | collectibles
28%
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| show | First-in, first-out method
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| show | False
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| Bridget, a single taxpayer, sold a building used in her business during the current year. The realized gain on the sale was $135,000. Of this amount, $95,000 is unrecaptured Section 1250 gain. How will Bridget be taxed on this gain assuming her marginal t | show 🗑
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| show | Broker's fees and other selling costs are deducted
Fair market value of any other property received by the seller
Cash received by the seller
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| show | Alcoholic beverages held over a year can qualify as a collectible.
Coin collections and stamp collections may qualify as collectibles.
A gain on collectibles is taxed at a maximum rate of 28 percent.
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| Section 1202 provides that owners of qualified small business stock that is sold during 2022 and has been held for at least five years can exclude up to _______ percent of the gain from taxation depending on the acquisition date. | show 🗑
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| Bob has capital losses of $4,000 that exceed his capital gains in the current year. Of this amount, $1,200 is a short-term capital loss and $2,800 is a long-term capital loss. The capital loss carryforward will be a $1,000 Blank______. | show 🗑
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| Chad incurred capital gains and losses during the current year. He has a $7,000 net short-term capital gain; a $14,000 long-term capital loss in the 15% category; and a $10,000 long-term capital gain taxed at 28%. How will these transactions be taxed afte | show 🗑
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| Which of the following statements is CORRECT regarding the sale of qualified small business stock (Sec. 1202 stock)? | show 🗑
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| Taxpayers can completely offset _________ __________ with capital losses. If an excess capital loss remains, married filing jointly taxpayers can deduct up to $ __________ per year against ordinary income. The loss exceeding that amount is carried forward | show 🗑
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| show | include
exclude
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| show | wash
sale
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| show | The loss generated by a wash sale is NOT deductible.
The unrecognized loss is added to the basis of the newly acquired stock.
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| If a taxpayer has a long-term capital loss in the 15% category, how is it used to offset capital gains in the other rate categories? | show 🗑
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| Which of the following types of transactions results in capital losses that are deductible for tax purposes? | show 🗑
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| What term is used to denote the interest incurred on loans used to acquire investments? | show 🗑
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| show | Sales of personal-use assets
Sales to related parties
Wash sales
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| show | Net short-term capital gains
Interest income
Non-qualified dividends
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| If a taxpayer sells a personal-use asset at a gain, the taxpayer Blank______ recognize a capital gain. If a taxpayer sells a personal-use asset at a loss, the taxpayer Blank______ recognize a capital loss. | show 🗑
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| True or false: All net capital gains are included in the definition of net investment income. | show 🗑
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| show | 3.8%
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| show | materially participate
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| show | lesser
modified
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| show | passive
portfolio
active
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| show | True
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| Which of the following statements regarding material participation is TRUE? | show 🗑
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| The entire $25,000 deduction for rental real estate is phased out when the taxpayer's AGI reaches $ ________ | show 🗑
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| Which of the following statements is true when considering the deductibility of a suspended passive loss? | show 🗑
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| show | 25,000
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| show | True
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| show | The suspended loss may be deducted against active or portfolio income when the taxpayer sells or divests of the passive activity.
The suspended loss may be deducted when a taxpayer generates passive income from that activity or another passive activity.
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Created by:
maddieestanfield