A finished ACC-460 Topic 6 basis and gain computation example, applying cost, inherited and gift basis rules to four dispositions and showing why one sale produces neither gain nor loss. Searches like "acc 460 topic 6 assignment example", "acc460 topic 6 sample" and "acc-460 topic 6 example" land here.
What a finished ACC-460 Topic 6 basis and gain computation looks like
The finished computation works four sales, each on its own panel. Purchased shares cost $8,000 plus a $200 commission, and $1,300 of reinvested dividends raises basis to $9,500 under sections 1012 and 1016; sold for $13,900 net, they produce $4,400 of long-term gain. Land inherited from a parent takes its $65,000 value at death under section 1014, not the parent's $20,000 cost, so a $70,000 sale yields $5,000, long-term by rule however briefly it was held. Gifted shares carry the donor's $12,000 basis for gain and the $9,000 value at the gift for loss, and a $10,500 sale falls between them, producing no gain or loss under section 1015. A personal car sold at a $7,000 loss gives no deduction under section 165(c). All figures are illustrative.
How an ACC-460 Topic 6 example is structured
Each disposition follows the same four lines so the reader can compare them. The first line identifies how the taxpayer acquired the asset, since acquisition decides which basis rule applies. The second states that rule with its section and computes starting basis. The third records adjustments, the reinvested dividends in one case and none in the others, with a note on why each adjustment belongs. The fourth applies section 1001, amount realized less adjusted basis, and assigns a holding period under section 1222. After the four panels, a summary sorts the results into long-term gain, no gain or loss, and a nondeductible personal loss. A closing paragraph explains why preferential rates on the $9,400 of long-term gain are left unstated: the brackets that apply are indexed and depend on the rest of the return, which a later topic assembles.
Acquisition decides the rule
Bought, inherited and received as a gift are three routes into ownership, and the computation names the route before choosing section 1012, 1014 or 1015.
Reinvested dividends added to basis
Dividends already taxed when reinvested become part of basis under section 1016, and leaving them out would tax the same $1,300 a second time on sale.
Value at death replaces the parent's cost
The inherited land starts at its $65,000 value on the date of death, so the $45,000 of appreciation during the parent's life is never taxed to the heir as income.
A gift sale inside the gap
Because the $10,500 price sits between the donor's basis and the lower value at the gift, neither basis produces a result and the sale reports nothing.
Personal losses stay personal
Section 165(c) limits an individual's deductible losses to business, profit-seeking and casualty categories, so the car's fall in value produces no deduction at all.
Where marks go in ACC-460 Topic 6
Basis is where this assignment is won or lost, and the losses are almost always arithmetic that started from the wrong rule. Using the parent's $20,000 cost for the inherited land overstates the gain by $45,000, the largest single error the fact pattern invites. Papers that give gifted shares the donor's basis in every case compute a $1,500 loss that the dual basis rule forbids. Omitting reinvested dividends overstates the stock gain by $1,300, a quiet error that markers look for specifically. A deducted car loss treats personal-use property as though it were held for profit. Holding periods counted by calendar for the inherited land miss that the Code treats it as long-term regardless. Stating a capital gains rate with no year or bracket attached is treated as an unsupported figure, because the rate turns on the whole return.
Get an ACC-460 Topic 6 example written to your instructions
Send your ACC-460 Topic 6 instructions and rubric, along with the property transactions in your fact pattern. We write a custom example to them, with the acquisition route and basis rule named for each asset, adjustments shown, gain or loss computed under section 1001 and the holding period assigned, back in 24 to 48 hours. The first one is free.
ACC-460 Topic 6 questions, answered
Why does inherited property get a new basis?
Section 1014 generally sets the basis of property acquired from a decedent at its fair market value on the date of death. Appreciation during the decedent's life is therefore never taxed as income to the heir, which makes it one of the more consequential rules in the individual system. The example shows the effect by setting the parent's cost beside the value used, so the untaxed appreciation is visible.
How can a sale produce neither gain nor loss?
When gifted property's value at the date of the gift was below the donor's basis. Section 1015 then gives the recipient two bases: the donor's basis for measuring gain and the lower value for measuring loss. A sale price between the two produces no gain under the first and no loss under the second. The example uses a $10,500 sale between $9,000 and $12,000 to show the gap.
Does the computation state the tax on the gain?
Not as a figure. Long-term capital gain is taxed at preferential rates, but which rate applies depends on the taxpayer's other income, filing status and that year's indexed brackets. The example computes the gain and its character, which the topic marks, and leaves the rate to the return. Stating a rate without that context would produce a figure with no rule behind it.