Determine the amount realized and the character by solar

Question

Question 1:

Your client brings you the following information for the past 3 years:

	Short-term capital gain	Short-term capital loss	Long-term capital gain	Long-term capital loss
Year 1	1000	1500	700	4000
Year 2	1000	900	100	3300
Year 3	900	200	100	1000

Using Excel, calculate the amount and type of capital gain or loss for each year, identifying any carryover.

Question 2:

Samson Corporation sold the following during the year:

• Two delivery trucks purchased in March 2016 for $78,000 are sold in June for $70,000
• Land used for storage for 5 years sold for $400,000 that had a basis of $80,000
• Machines with a basis of $200,000 are sold for $75,000 to obtain newer models.
• A building purchased 8 years ago for $350,000 is sold for $425,000 with an adjusted basis of $300,000 due to depreciation.

What is the character and amount of gain or loss recognized? Put your response in Excel.

Question 3:

Samantha sold the following assets during 2016:

• Her home, which she had lived in for 10 years, for a gain of $75,000
• Stock in BASS purchased in 2014 for $10,000 was sold for $16,000.
• Stock in TREBLE purchased on January 23, 2016 for $4,000 was sold on October 15, 2016 for $4,500.
• A collectible motorcycle sold on August 19 for $17,000. She had purchased it for $15,000 in December of 2013.

1. Determine the character and amount of Samantha's gains and losses.
2. How would your answer change if Samantha had initially purchased her home as a vacation home but has used it as her principle residence for the last 4 years? Put your answers in Excel.

Question 4:

Determine the amount realized and the character by Solar Corporation on the sale of the following equipment:

PV1 purchased in 2012 for $10,000 and sold for $8,000. PV1 has an adjusted basis of $5,000.

PV2 purchased in 2013 for $25,000 and sold for $16,000. PV2 has an adjusted basis of $18,000.

Assume Solar Corporation had ordinary income of $35,000 from all other sources and no other asset sales or transactions. How does the sale of PV1 and PV2 affect ordinary income? Put your answers in Excel.