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Brandt exchanged his collection of stamp albums for a tractor from Virgil in September 2018. The fair market value of the stamp albums is $3,000. The tractor has the same $3,000 fair market value. The collection of stamps cost Brandt $2,000 over the years to assemble. How should Brandt report this transaction on his income tax return? A. He reports it as a capital transaction with a $0 gain B. He is not required to report it because it is not taxable C. He attaches a statement to his return explaining that the exchange was for something of equal value D. He reports a $1,000 capital gain

Respuesta :

donaldcredo

Answer:

C. He attaches a statement to his return explaining that the exchange was for something of equal value

Explanation:

anthougo

Brandt should report this transaction on his income tax return as D. He reports a $1,000 capital gain.

  • According to the statement, the stamps cost Brandt $2,000 for assembling them.

  • With the exchange of the stamp albums for a tractor that is worth $3,000, Brandt records a capital gain of $1,000 ($3,000 - $2,000).

  • Brandt will not report the transaction with a $0 gain.  Capital gain on stamps collection is taxable. Finally, Brandt does not need to explain that the exchange had equal value.

Thus, Brandt is expected to report a capital gain of $1,000 from the capital transaction.

Read more about capital gains at https://brainly.com/question/19644071

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