# Ac553 Wk 7 Assignment

Topics: Taxation, Stock, Tax Pages: 3 (564 words) Published: February 3, 2013
AC553
Week 7

Questions

10-1
Distinguish between realized gains and losses and recognized gains and losses.

Realized gain/loss is the gain or loss resulting from the sale or disposition of property. However, recognized gain or loss is determined to be taxable income or a deductible loss. There are many situations in which a gain or loss may be realized but may not be recognized.

Problems

10-47
On April 18, 2011, Jane Juniper purchased 30 shares of Bryan Corp. stock for \$210, and on September 29, 2011, she purchased 90 additional shares for \$900. On November 28, 2011, she sold 48 shares, which could not be specifically identified, for \$576 and on December 8, 2011, she sold another 25 shares for \$188. What is her recognized gain or loss? 30 shares for \$210= \$7 per share

90 share for \$900= \$10 per share
Total=\$700 Investment
30 to 480 shares sold at \$12 for a gain of \$150 according to FIFO rules. The remain of the 48 shares sold at \$12 for a gain of \$36 Total gain =\$186 25 shares sold at \$7.52 for a loss of \$62
Total Gain= \$124.00

11-40
Debbie Davis and Elizabeth Engels exchanged like-kind property. Debbie hand an adjusted basis of \$12,000 in her property (fair market value is \$15,000). Elizabeth’s property had an adjusted basis of \$9,000 and a fair market value of \$10,500, and Elizabeth gave Debbie \$4,500 in cash. Determine Debbie’s and Elizabeth’s realized gain or loss, recognized gain or loss, and the basis in their new property.

DebbieElizabeth
Property exchange Amount:\$15,000\$10,500
Fair Market Value:\$0\$4,500
Realized Gain:\$0\$4,500
Basis of New Property:\$12,000\$13,500

12-34
Jim Junction purchased a truck for business on November 17, 2010 fir \$40,000. On July 21, 2011 he exchanged the truck for another truck in a like kind exchange. The new truck had a fair market value of \$42,000. When does the holding period on the new truck begin...