15-48 Wayne's tax liability without the ANGG Wayne's tax liability with the ANCG ssser with a $50,000 basis and a holding period of three years. The investor wishes to sell the asset at a price high enough so that he will have $120,000 in cash after paying the Compating the Sales Price. An investor in a 28% tax bracket owns land that is a capital ried individual, and analyze the effects of the capital gains and losses on the individual's Capital Gains and Losses. Consider the four independent situations below for an unmar AGI. For each case, determine AGI after considering the capital gains and losses. taxes. What is the minimum price which the investor could accept? Situation 1 Situation 2 Situation 3 Situation 4 transactions) AGI (excluding property STCG $40,000 +$50,000 STCL 6,000 $60,000 $70,000 2,000 LTCG 2,000 5,000 6,000 $,000 LTCL 3,500 4,000 15,000 15,000 2,500 10,000 9,000 4,000 12,000 4,000 Capital Losses. To better understand the rules for offsetting capital losses and how to treat capital losses carried forward, analyze the following data for an unmarried individ- ual for the period 2006 through 2009. No capital loss carryforwards are included in the figures. For each year, determine AGI and the capital losses to be carried forward to a later tax year AGI (excluding property transactions) STCG STCL LTCG LTCL AGI (including property transactions) STCL to be carried forward 2006 2007 2008 2009 $40,000 $50,000 $60,000 $70,000 4,000 5,000 7,000 10,000 9,000 3,000 5,000 12,000 6,000 10,000 2,200 6,000 3,000 21,000 1,000 9,500 LTCL to be carried forward Character of Loss. The Michigan Corporation owns 20% of the Wolverine Corporation. The Wolvering stock was acquired eight years ago to ensure a steady sup- ply of raw materials. Michigan also owns 30% of Spartan Corporation and 85% of Hurn Corporation. Stock in both corporations was acquired more than ten years ago for investment purposes. During the current year, Wolverine, Spartan, and Huron are deemed bankrupt, and the stocks are considered worthless. Describe how Michigan should treat its losses:" Original Issue Discount. On December 31, 2008, Phil purchased $20,000 of newly issued bonds of Texas Corporation for $16,568. The bonds are dated December 31, 2008. The bonds are 9%, 10-year bonds paying interest semiannually on June 30 and December 31. The bonds are priced to yield 12% compounded semiannually. a. What is the amount of the original issue discount? b. For the first semiannual period, what is the amount of the original issue discount Phil must recognize as ordinary income? c. What is the total amount of interest income Phil must recognize in 2009? d. What is Phil's basis for the bonds as of December 31, 2009? On January 1, 2007, Swen paid $184,000 for $200,000 of the 8%, 20-year bonds of Penn Corporation, issued on January 1, 2003, at par. The bonds are held as an investment. Determine the gain and the character of the gain if the bonds are sold on January 1, 2009, for a. $191,000 b. $185,750 $100.00