Question
All tax calculations should be based on the 2020 Tax Rate Schedules. Figures should be rounded to the nearest dollar. Percentages should be rounded to
All tax calculations should be based on the 2020 Tax Rate Schedules. Figures should be rounded to the nearest dollar. Percentages should be rounded to the nearest whole percentage (e.g., 32% instead of 32.2%)
Gifts. Jeffrey gave his beloved nephew Adam a ruby on May 1, 2019. Jeffrey found the ruby in a cave on January 1, 2018, when it was worth $5,000. Jeffrey reported $5,000 gross income in 2018 for this found property. When he gave it to Adam (May 1, 2019), its value had increased to $5,200. Deeply in debt and needing cash, Adam quickly sold the ruby on June 2, 2019, for $3,000. How much was Adams capital loss in 2019 and was it long-term or short-term?
A) $2,200 long-term capital loss
B) $2,000 short-term capital loss
C) $2,000 long-term capital loss
D) $2,200 short-term capital loss
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