$1.$ Critical Thinking

Sheila inherited $300$ shares of stock, $100$ shares of Magenta and $200$ shares of Purple. She has a stockbroker sell the shares for her, uses the proceeds for personal expenses, and thinks nothing further about the transactions. What issues does she face when she prepares her Federal income tax return?

$2.$ Critical Thinking

An individual taxpayer sells some used assets at a garage sale. Why are none of the proceeds taxable in most situations?

$3.$ Critical Thinking

Alison owns a painting that she received as a gift from her aunt $10$ years ago. The aunt created the painting. Alison has displayed the painting in her home and has never attempted to sell it$.$ Recently, a visitor noticed the painting and offered Alison $$5,000$ for it$.$ If Alison decides to sell the painting, what tax issues does she face?

$4.$ LO$\mathrm{.}2$ Is a note receivable that arose in the ordinary course of the taxpayer$$s retail business a capital asset? Why or why not?

$5.$ After netting all of her short$-$term and long$-$term capital gains and losses, Misty has a net short$-$term capital loss and a net long$-$term capital loss. Can she net these against each other? Why or why not?

$6.$ A depreciable business dump truck has been owned for four years and is no longer useful to the taxpayer. What would have to be true for the disposition of the dump truck to generate at least some $1231$ loss?

$7.$ Thomas receives tangible personal property as an inheritance from a decedent who died in $2023.$ The property was depreciated by the deceased, and Thomas will also depreciate it$.$ At the date of the deceased$$s death, the property was worth more than the deceased$$s adjusted basis. What is the impact of these facts on Thomas when he sells the property at a gain several years after he acquired it$?$

$8.$ Renata Corporation purchased equipment in $2021$ for $$180,000$ and has taken $$83,000$ of regular MACRS depreciation. Renata Corporation sells the equipment in $2023$ for $$110,000.$ What is the amount and character of Renata$$s gain or loss?

$9.$ Jacob purchased business equipment for $$56,000$ in $2020$ and has taken $$35,000$ of regular MACRS depreciation. Jacob sells the equipment in $2023$ for $$26,000.$ What is the amount and character of Jacob$$s gain or loss?