26- Capital losses incurred by a married couple filing a joint return

May be carried forward up to a maximum of 5years.

Will be allowed only to the extent of capital gains.

Will be allowed to the extent of capital gains, plus up to $3,000 of ordinary income.

Are not allowable losses.

27- Andrew purchased Maple Manufacturing Company on March 17 of the current year for a lump-sum price of $3.5 million. The value of the assets was as follows:

Carrying

Fair Market

Amount

Value

Inventory

$100,000

$100,000

Cash

500,000

500,000

Equipment

1,650,000

1,750,000

Building

400,000

750,000

Land

100,000

150,000

Covenant not to compete

0

175,000

Goodwill

0

75,000

Andrew assumed no liabilities. What is his basis in the covenant not to compete?

$350,000

$150,000

$185,000

$175,000

28- For 2020, Mr. G has a short-term capital loss of $4,000, a short-term capital gain of $1,900, a short-term capital loss carryover from 2018 of $700, a long-term capital gain of $800 from property held for 3years, and a long-term capital loss of $1,500 from property held for 4years. Mr.G is in the 15% breakpoint basket. What is Mr.G's deductible loss in 2020?

$2,800

$0

$3,000

$3,500