Part 1. Use the provided Excel spreadsheet. On Worksheet Column Part 1, Assume t
ID: 2383977 • Letter: P
Question
Part 1. Use the provided Excel spreadsheet. On Worksheet Column Part 1, Assume the there are no capital loss carryforwards in each of the independent situations presented. You are to:
Calculate AGI that includes the property transactions
Determine the amount and character (short-term or long-term) of any carryforward (if any)
Part 2. On Worksheet Column Part 2, compute the tax liability given each independent situation presented. Review Concept Summary 14.4 on page 14-26 for applicable tax rates. Also review the netting process on pages 14-21 through 14-26 of the text.
Requirements:
Clearly identify the requirements being addressed. Show all calculations within the cells of an Excel spreadsheet. This means that you must use formulas and links so that the thought process can be examined. Make good use of comments to convey your thought process as well. No hard coding of solutions. Submit a single MS Excel file for grading.
Explanation / Answer
S.no. Transactions Solution-Part I a The taxpayer has W-2 income of $50,000 and sold stock purchased 6 months ago for $5,000. The shares were purchased for $500 Adjusted gross income is $50000;No proceeds from capital gains b The taxpayer has W-2 income of $50,000 and sold stock purchased 3 years ago for $5,000. The shares were purchased for $50 Adjusted gross income is $50000;No proceeds from capital gains c The taxpayer has W-2 income of $50,000 and sold personal residence purchased 3 years ago for $400,000. The home was purchased for $100,000 (with no other basis adjustments). Long term capital gain comes to 3 lakhs.Hence,adjusted gross income is $350000. d The taxpayer has W-2 income of $50,000 and sold personal residence purchased 3 years ago for $400,000. The home was purchased for $300,000 (with no other basis adjustments). Long term capital gain comes to 1 lakh.Hence,adjusted gross income is $150000. e The taxpayer has W-2 income of $50,000 and sold stock purchased 3 years ago for $5,000. The shares were purchased for $5000 Adjusted gross income is $50000;No proceeds from capital gains f The taxpayer has W-2 income of $50,000 and sold stock purchased 3 months ago for $5,000. The shares were purchased for $500 Adjusted gross income is $50000;No proceeds from capital gains g The taxpayer has W-2 income of $50,000. The taxpayer made a loan (with a written agreement) to a friend for $2,000. The friend filed for bankruptcy and will not be repaying the loan Adjusted gross income is $50000. h The taxpayer has W-2 income of $50,000. The taxpayer made a loan (with a written agreement) to a friend for $5,000. The friend filed for bankruptcy and will not be repaying the loan Adjusted gross income is $50000.