1. Elvin, a single taxpayer 45 years of age, sells his residence in 2016. He receives $35,000 in cash, and the buyer assumes his $100,000 mortgage. Elvin also pays $8,100 in commissions and transfer costs.

a. Calculate the amount realized on the sale. $____________________________

b. If the residence was acquired in 1986, and its adjusted basis is $75,000, calculate the amount and nature of the TAXABLE gain on the sale (assuming he does not purchase a new residence). $____________

2. In 2016, Michael has net short-term capital losses of $1,500, a net long-term capital loss of $27,000, and other ordinary taxable income of $45,000.

a. Calculate the amount of Michael’s deduction for capital losses for 2016 $___________

b. Calculate the amount of his capital loss carryforward. $___________

c. For how long may Michael carry forward the unused loss?___________