SOUTH-WESTERN FEDERAL TAXATION
2024 COMPREHENSIVE VOLUME 47TH
EDITION YOUNG PERSELLIN NELLEN
MALONEY CUCCIA LASSAR CRIPE
SOLUTION MANUAL FINAL STUDY GUIDE
2026 SOLVED QUESTIONS FULLY CORRECT
⫸ Capital asset Answer: Broadly speaking, all assets are capital except
those specifically excluded from that definition by the Code. Major
categories of noncapital assets include property held for resale in the
normal course of business (inventory), trade accounts and notes
receivable, and depreciable property and real estate used in a trade or
business (§ 1231 assets). § 1221.
⫸ Capital gain Answer: The gain from the sale or exchange of a capital
asset.
⫸ Capital loss Answer: The loss from the sale or exchange of a capital
asset.
⫸ Collectibles Answer: A special type of capital asset, the gain from
which is taxed at a maximum rate of 28 percent if the holding period is
more than one year. Examples include art, rugs, antiques, gems, metals,
stamps, some coins and bullion, and alcoholic beverages held for
investment.
, ⫸ Franchise Answer: An agreement that gives the transferee the right to
distribute, sell, or provide goods, services, or facilities within a specified
area. The cost of obtaining a franchise may be amortized over a statutory
period of 15 years. In general, the franchisor's gain on the sale of
franchise rights is an ordinary gain because the franchisor retains a
significant power, right, or continuing interest in the subject of the
franchise. §§ 197 and 1253.
⫸ Lessee Answer: One who rents property from another. In the case of
real estate, the lessee is also known as the tenant.
⫸ Lessor Answer: One who rents property to another. In the case of real
estate, the lessor is also known as the landlord.
⫸ Long-term nonpersonal use capital assets Answer: Includes
investment property with a long-term holding period. Such property
disposed of by casualty or theft may receive § 1231 treatment.
⫸ Net capital gain (NCG) Answer: The excess of the net long-term
capital gain for the tax year over the net short-term capital loss. The net
capital gain of an individual taxpayer is eligible for the alternative tax. §
1222(11).
⫸ Net capital loss (NCL) Answer: The excess of the losses from sales
or exchanges of capital assets over the gains from sales or exchanges of
such assets. Up to $3,000 per year of the net capital loss may be
deductible by noncorporate taxpayers against ordinary income. The
excess net capital loss carries over to future tax years. For corporate
2024 COMPREHENSIVE VOLUME 47TH
EDITION YOUNG PERSELLIN NELLEN
MALONEY CUCCIA LASSAR CRIPE
SOLUTION MANUAL FINAL STUDY GUIDE
2026 SOLVED QUESTIONS FULLY CORRECT
⫸ Capital asset Answer: Broadly speaking, all assets are capital except
those specifically excluded from that definition by the Code. Major
categories of noncapital assets include property held for resale in the
normal course of business (inventory), trade accounts and notes
receivable, and depreciable property and real estate used in a trade or
business (§ 1231 assets). § 1221.
⫸ Capital gain Answer: The gain from the sale or exchange of a capital
asset.
⫸ Capital loss Answer: The loss from the sale or exchange of a capital
asset.
⫸ Collectibles Answer: A special type of capital asset, the gain from
which is taxed at a maximum rate of 28 percent if the holding period is
more than one year. Examples include art, rugs, antiques, gems, metals,
stamps, some coins and bullion, and alcoholic beverages held for
investment.
, ⫸ Franchise Answer: An agreement that gives the transferee the right to
distribute, sell, or provide goods, services, or facilities within a specified
area. The cost of obtaining a franchise may be amortized over a statutory
period of 15 years. In general, the franchisor's gain on the sale of
franchise rights is an ordinary gain because the franchisor retains a
significant power, right, or continuing interest in the subject of the
franchise. §§ 197 and 1253.
⫸ Lessee Answer: One who rents property from another. In the case of
real estate, the lessee is also known as the tenant.
⫸ Lessor Answer: One who rents property to another. In the case of real
estate, the lessor is also known as the landlord.
⫸ Long-term nonpersonal use capital assets Answer: Includes
investment property with a long-term holding period. Such property
disposed of by casualty or theft may receive § 1231 treatment.
⫸ Net capital gain (NCG) Answer: The excess of the net long-term
capital gain for the tax year over the net short-term capital loss. The net
capital gain of an individual taxpayer is eligible for the alternative tax. §
1222(11).
⫸ Net capital loss (NCL) Answer: The excess of the losses from sales
or exchanges of capital assets over the gains from sales or exchanges of
such assets. Up to $3,000 per year of the net capital loss may be
deductible by noncorporate taxpayers against ordinary income. The
excess net capital loss carries over to future tax years. For corporate
