More prior EA SEE Exam problems

[taxguy057]

Hey Guys!

Back with some more brain teasers...

Alf owns all of the shares of Waxman Corporation, a

manufacturer of finished leather products. Alf also owns

a 60% partnership interest and his friend Richard owns a

40% partnership interest in York Real Estate Rentals,

LLC. York Real Estate Rentals, LLC owns and leases

warehouse space to numerous businesses. In 2004,

York Real Estate Rentals, LLC sold a building with an

adjusted basis of $100,000 to Waxman Corporation for

$80,000. What is the amount of York Real Estate Rent-

als, LLC’s deductible loss in 2004 from this transaction?

A. $(20,000)

B. $(12,000)

C. $(8,000)

D. $(0)

Yousef and Ramina (husband and wife) purchased 10

shares of stocks in Yam Company on August 31, 2003,

for $850. They sold 25 shares of stock in Tray Company

for $900 on April 10, 2004. They had purchased the 25

Tray Company shares in 1993 for $100. They also sold

20 shares of stock of Delta Company on December 1,

2004 for $500. They had purchased the 20 Delta Com-

pany shares in 2002 for $4,500. Yousef and Ramina’s

taxable income on their joint 2004 return was $33,000

before these stock transactions. Assume Yousef and

Ramina had no other capital transactions in 2004. What

is Yousef and Ramina’s currently deductible capital loss

for 2004 and what is their capital loss carryover to the

next year?

A. They can deduct $3,200 in long-term capital

loss and carry over a capital loss of $800

B. They can deduct $4,000 in long-term capital

loss

C. They can deduct $3,000 in long-term capital

loss and carry over a capital loss of $200

D. They can deduct $500 in long-term capital loss

[Pacun]

On the first one (since this is a related party transaction) I would go with zero loss (D).

On the other one, I go with answer C since they had a loss of $3,200 but they can only claim $3,000 in the current year. They had a long term gain of $800 on the Tray company transaction and they had a long term loss of $4,000 on the Delta transaction.

Again, I am doing it from my head so I could be wrong.

[taxguy057]

On the first one (since this is a related party transaction) I would go with zero loss (D).

On the other one, I go with answer C since they had a loss of $3,200 but they can only claim $3,000 in the current year. They had a long term gain of $800 on the Tray company transaction and they had a long term loss of $4,000 on the Delta transaction.

Again, I am doing it from my head so I could be wrong.

Good head you got there buddy! Right on both.... as usual! LOL! I figured on the first one, it had something do with it being "related" so would it be (20,000) if to someone outside the partnership? Now for second one, I see they gave the TI of the TP so is there a threshold amount that will affect capital loss amount and carryover or was that just thrown in to misdirect?

Know you have better questions to answer but let me know if you want another. Seems like you're the only participant so far.... See if i can find one that will lure jainen out of his cave! :scratch_head:

[Pacun]

The taxable income was given because if it was only $990.00, then none of the answers would be the correct one because of TI limitation.