number 9 Social Security benefits Pension from her former employer Cash gifts fr
ID: 2336595 • Letter: N
Question
number 9
Social Security benefits Pension from her former employer Cash gifts from her grandchildren $13,670 10,800 12,000 Mrs. Small's pension was paid by a qualified defined-benefit plan. Compute Mrs. Small's AGI. 9. Milt Payner purchased an automobile several years ago for $40,000 and has held it as a personal asset ever since. This year he sold the automobile. Compute Milt's recognized gain or loss on the sale if: a. Milt's amount realized on sale was $28,300. b. Milt's amount realized on sale was $55,000. The automobile was a classic Thunderbird and was purchased by a vintage car collector in Boston. 10. Conrad Smith, a business executive, is an avid collector of vintage comic books. In February, he sold a 1938 Superman comic for $3,700 that he had purchased six years for $625 In December, Conrad sold a 1950 Donald Duck comic for $575 thatExplanation / Answer
Solution:
The rule is when there is property held for individual utilize is considered as capital resource. At the point when this benefit is sold and there is misfortune on special it isn't deductible, however on the off chance that there is gain than it is accounted for as capital gain in the expense form. The misfortune can be perceived just on the off chance that it occured because of causality or robbery.
Answer a.
$0 is recognized loss.
An Automobile is utilized by Milt for individual utilize. Milt sold it for $28300 and obtained it a multi year back for 40000. So there would be capital loss of $11700 (40000-28300) however this isn't deductible on your expense form as it was held for individual utilize.
So, $0 is recognized loss.
Answer b.
$15000 is recognized as capital gain.
For this situation their will be gain of $15000 (55000-40000) and it will be perceived as capital gain and investigated the arrival.
So, $15000 is perceived as capital gain.
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