Reference no: EM133116195

Questions -

Q1. During 20X1, Taxpayer, Corporation incurred a net long-term capital loss of $25,000. During 20X2, Taxpayer generated a long-term capital gain of $10,000. What is the tax treatment for the transactions presented above in taxable year 20X2?

a. Net long-term capital gain of $0; a net capital loss of $15,000 is carried forward for 20X3.

b. Net long-term capital gain of $10,000.

c. Net long-term capital gain of $0; a net capital loss of $12,500 is carried forward for 20X3.

d. Net long-term capital gain of $1,000; a net capital loss of $16,000 is carried forward for 20X3.

Q2. During 20X1, Taxpayer, an individual, obtained the following results with various transactions related to his properties:

Short-term capital gain of $18,000

Long-term capital loss of $25,000

What is the realized and recognized gain or loss in 20X1 for the Taxpayer in Puerto Rico?

a. Net long-term capital loss $7,000; recognized capital loss $1,000.

b. Net long-term capital loss $7,000; recognized capital loss $3,000.

c. Short-term realized capital gain $18,000; recognized capital loss $7,000.

d. Net long-term capital loss $7,000; recognized capital loss $7,000.

Q3. During 20X1, Taxpayer, Corporation, obtained the following results with various transactions related to its properties:

Short-term capital gain of $18,000

Long-term capital loss of $25,000

What is the realized and recognized gain or loss in 20X1 for the Taxpayer in Puerto Rico?

a. Short-term net realized capital gain $18,000; recognized capital loss $25,000.

b. Net realized long-term capital gain $18,000; recognized capital loss $0.

c. Net realized long-term capital loss $7,000; recognized capital loss $0.

d. Net realized long-term capital loss $7,000; recognized capital loss $1,000.