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Exam 7: Investments

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Question 51

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Kevin bought 200 shares of Intel stock on January 1, 2020, for $50 per share, with a brokerage fee of $100. Then, Kevin sells all 200 shares for $75 per share on December 12, 2020. The brokerage fee on the sale was $150. What is the amount of the gain/loss Kevin must report on his 2020 tax return?

A) $4,500.
B) $4,750.
C) $5,000.
D) $5,250.
E) None of the choices are correct.

F) A) and B)
G) All of the above

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Question 52

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Mr. and Mrs. Smith purchased 115 shares of stock for $42 per share on June 30, 20X6. On March 30, 20X8, the Smith family decides to sell these shares for $27, generating a loss of $15 per share. On April 15, 20X8, the Smith family realized they made a mistake and repurchased 115 shares for $38 per share. When will the Smith family receive a tax benefit for the loss on the March 30, 20X8, sale?

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The Smith family will have a (${{[a(7)]:...

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Question 53

Multiple Choice

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Ms. Fresh bought 1,000 shares of Ibis Corporation stock for $5,000 on January 15, 2018. On December 31, 2020, she sold all 1,000 shares of her Ibis stock for $4,500. Based on a hot tip from her friend, she bought 1,000 shares of Ibis stock on January 23, 2021, for $3,000. What is Ms. Fresh's recognized loss on her 2020 sale, and what is her basis in her 1,000 shares purchased in 2021?

Cory recently sold his qualified small business stock for $82,000 after holding it for 10 years. His basis in the stock is $48,000. Applying the rules as if the stock were acquired in 2020 and assuming his marginal tax rate is 32 percent, how much tax will he owe on the sale?

Henry, a single taxpayer with a marginal tax rate of 35 percent(taxable income is $309,000 before considering any of the items below), sold the following assets during the year: *$25,450 of the gain is a 25 percent gain. The remaining gain is 0/15/20 percent gain. What tax rate(s)will apply to Henry's capital gains or losses?

Unrecaptured §1250 gain is taxed at the 28 percent preferential capital gains rate.

When a bond is purchased in the secondary bond market at a discount, the amount of discount treated as interest income when the bond is sold prior to maturity is the:

Investment interest expense is a for AGI deduction.

Kevin bought 230 shares of Intel stock on January 1, 2020, for $62 per share, with a brokerage fee of $130. Then, Kevin sells all 230 shares for $81 per share on December 12, 2020. The brokerage fee on the sale was $180. What is the amount of the gain/loss Kevin must report on his 2020 tax return?

Passive losses that exceed passive income are deferred until the taxpayer generates passive income to offset these passive losses or until the taxpayer disposes of that activity.

Interest earned on U.S. savings bonds is interest received at sale or maturity but must be taxed annually.

The Crane family recognized the following types of investment income during 20X6: (1)$1,500 qualified dividends, (2)$3,000 long-term capital gains, and (3)$850 taxable interest. Additionally, the Crane family has $500 in investment expenses for the year. The Crane family paid $3,333 in investment interest expense during 20X6. Calculate the different possibilities to determine the maximum deduction for investment interest expense for the Crane family in 20X6. From these possibilities, which provides the maximum deduction?

Investment interest expense does not include: