Magdiel enters into the following transactions with regard to Vreeland Corporation common and preferred stock:

Date Transaction Amount 2/3/16 Purchases 500 common shares $15,500 9/8/16 Purchases 150 common shares 4,700 9/20/16 Sells original 500 common shares 9,500 9/25/16 Purchases 50 preferred shares 2,000 9/27/16 Purchases 150 common shares 3,800 12/1/16 Purchases 100 common shares 3,000 What is the loss on the sale of the 500 shares and how much of that loss can be recognized (i.e. reported on your return (Explain your answer)? What is the "new" basis of each subsequent purchase of stock?

Question 6

Orellys owned 200 shares of Gillespie Corporation stock with a basis of $12,000 and a FMV of $24,000. Orellys received 50 stock rights as a nontaxable distribution with a total FMV of $8,000. Each right provides Orellys the opportunity to buy one share of stock for $60 per share. Orellys sells 30 of the rights for $4,000 and he exercises the right to purchase additional shares with the remaining rights. Orellys sells the original 200 shares for $15,000.

Analyze these transactions. Explain and tell me what the (1) gain or loss on the sale of the rights is, (2) the gain or loss on the sale of the 200 shares of stock and (3) the basis of the remaining 30 shares purchased via the rights.

Question 7

Terronne told Stephanie that he was considering the sale of two different pieces of property. The first property was a house given to him by his aunt Carliza (in recognition of her A in Federal Tax). At the time of the gift, the house had a FMV of $78,000 and his aunts adjusted basis was $100,000. Terronnes aunt paid gift tax of $12,000 on the house. Archie offer to buy the house from Terronne for $105,000. Terronne also received a tract of land from another aunt via inheritance. The land has an adjusted basis of 27,000 and FMV of 33,000. He has an offer (from Joann) of $39,000.

What would be the gain on each piece of property? Explain your answer.

Question 8

Hao and Marcus seek advice from Nathia regarding their current tax situation. They have adjusted gross income of $52,500. They also have a long term capital loss of $12,000 and a long term capital gain of $8,000 from the sale of Wogbedi Corporation stock.

What is the impact of this transaction on their taxable income? Explain your answer in detail

Question 9

Craig sells land with an adjusted basis of $73,000 and a fair market value of $64,000 to his mother, Marquita, for $64,000. Marquita holds the land for two years and sells it in the marketplace (to Crista) for $72,000.

Determine the tax consequences to Craig and Marquita.

How would your answer to (a) above change if Marquita sold the property for $60,000?