| Course | ACC-4210 Federal Income Taxation |
|---|---|
| Module | Module 5 |
| Paper type | Written Assignment 5: tax credits and property transactions |
| Length | About 756 words, 5 pages |
| Format | APA 7 student paper |
| School | Thomas Edison State University |
| Program | Bachelor of Science in Business Administration |
| Updated | October 2026 |
Free sample paper for ACC 4210 Module 5
Credits for the Prices and Five Property Transactions for Gloria Okafor
Student Name
Bachelor of Science in Business Administration, Thomas Edison State University
ACC-4210: Federal Income Taxation
Mentor Name
Month Day, Year
Credits for the Prices and Five Property Transactions for Gloria Okafor
Introduction
Credits reduce tax dollar for dollar, and property transactions turn on basis, the measure of investment that decides how much of a sale price is gain. This assignment applies both sets of rules.
Part A: Discussion Questions
1. Why is a credit worth more than a deduction of the same amount? A $1,000 deduction saves tax equal to $1,000 times the taxpayer's marginal rate, so it is worth $120 to someone in the 12% bracket and $370 to someone in the 37% bracket. A $1,000 credit saves $1,000 regardless of bracket. Credits are therefore used when Congress wants a benefit to be equal across incomes, or targeted to lower incomes through phase-outs and refundability. Hoynes et al. (2015) found that expansions of the earned income tax credit improved infant health among lower-income families, evidence that refundable credits reach the households they target.
2. Why does inherited property receive a stepped-up basis while gifted property keeps the donor's basis? An heir's basis is generally fair market value at death, so appreciation during the decedent's life is never taxed as income; the estate tax, which applies only to very large estates, was meant to tax the transfer instead. A gift recipient takes the donor's basis, so the appreciation is taxed when the recipient sells, which prevents taxpayers from shifting gains to family members in lower brackets. When gifted property has declined in value, a dual basis rule prevents the recipient from deducting a loss that occurred while the donor held it (Young et al., 2024).
Part B: The Prices' Credits
The Prices' 2024 tax before credits was $11,296, from Module 4. Their AGI of $129,050 is below the phase-out thresholds for each credit below, using the 2024 amounts (Internal Revenue Service [IRS], 2023).
Tax after credits is $11,296 minus $3,480, or $7,816. The Prices do not qualify for the earned income tax credit, which phases out well below their income, and the American opportunity credit does not apply to graduate study.
| Credit | Facts | Amount |
|---|---|---|
| Child tax credit | Aaliyah, 10, is a qualifying child under 17 | $2,000 |
| Child and dependent care credit | $4,200 of after-school care while both parents worked; expenses limited to $3,000 for one child; rate 20% at their AGI | 600 |
| Lifetime learning credit | Simone paid $4,400 of tuition for graduate courses; 20% of qualified expenses | 880 |
| Total credits | | $3,480 |
Part C: Gloria Okafor's Property Transactions
Gloria Okafor, 66, is a retired teacher in Cherry Hill who files as single.
1. Home sale. Gloria sold the house she had owned and lived in for 22 years for $520,000, paying $31,000 of selling costs. Her basis was $185,000, the $140,000 purchase price plus $45,000 of improvements. Amount realized is $489,000 and realized gain is $304,000. Because she owned and used the home as her principal residence for at least two of the last five years, she excludes $250,000, the limit for a single filer, and recognizes $54,000 of long-term capital gain.
2. Like-kind exchange. Gloria exchanged a rental townhouse in Haddonfield, adjusted basis $150,000 and fair market value $230,000, for a rental condo in Margate worth $215,000 plus $15,000 cash. Real property held for investment qualifies for like-kind treatment.
Gloria had claimed $30,000 of depreciation on the townhouse, so the whole $15,000 she must report falls in the unrecaptured Section 1250 category, which carries a 25% ceiling rate.
3. Inherited stock. Gloria inherited shares from her brother in 2022, worth $40,000 at his death, and sold them in 2024 for $37,500. Her basis is the $40,000 stepped-up value, so she has a $2,500 loss, automatically long term because the property was inherited.
4. Gifted shares. In 2020 Gloria's sister gave her shares with a basis of $12,000 and a value of $9,000 at the time of the gift. Gloria sold them for $10,500. Under the dual basis rule, her basis for gain is $12,000 and her basis for loss is $9,000. A sale at $10,500 produces no gain, because it is below $12,000, and no loss, because it is above $9,000.
5. Cryptocurrency. Gloria bought a digital asset in March 2024 for $6,000 and sold it in October for $4,200, a $1,800 short-term capital loss. Digital assets are property, not currency, for federal tax purposes.
| Exchange | Amount |
|---|---|
| Amount realized: $215,000 + $15,000 | $230,000 |
| Adjusted basis given up | (150,000) |
| Realized gain | 80,000 |
| Recognized gain: the lesser of boot received or realized gain | 15,000 |
| Deferred gain | 65,000 |
| Basis of the new condo: $215,000 minus $65,000 deferred | $150,000 |
References
Hoynes, H., Miller, D., & Simon, D. (2015). Income, the earned income tax credit, and infant health. American Economic Journal: Economic Policy, 7(1), 172-211. https://doi.org/10.1257/pol.20120179
Internal Revenue Service. (2023). Revenue Procedure 2023-34: Inflation adjusted items for 2024.
Young, J. C., Nellen, A., Persellin, M. B., Lassar, S. S., Cuccia, A. D., & Cripe, B. M. (2024). South-Western federal taxation: Individual income taxes, 2024 (47th ed.). Cengage Learning.
Reading the ACC 4210 Module 5 assignment instructions
Written Assignment 5 covers Module 5, Tax Credits and Property Transactions, two topics the module pairs because both decide how much tax results from a given set of facts. Discussion questions and problems are again taken from the assigned chapters, now the ones on credits and property. Expect credit problems on the child tax credit, dependent care credit, education credits and earned income credit, with their limits and phase-outs, and property problems on amount realized, adjusted basis, gifts and inheritances, the home sale exclusion and like-kind exchanges with boot. The problems on this page are original, use 2024 amounts and follow the textbook's layout. Credit problems often add a phase-out calculation for higher-income filers, so watch the AGI figures given.
How this ACC 4210 Module 5 example is built
Part A answers two discussion questions that explain why credits differ from deductions and why basis rules differ for gifts and inheritances, with a research finding on refundable credits. Part B applies three credits to the household from earlier assignments in one table and computes tax after credits, noting two credits that do not apply. Part C works five property transactions for a second taxpayer in a consistent order: amount realized, basis, realized gain, recognized gain and character. The like-kind exchange gets its own table, including the new property's basis computed two ways. The results feed the capital gain netting in the next assignment. The new condo's basis is checked two ways, a habit that catches arithmetic slips.
ACC 4210 Module 5 rubric: what earns full marks
The credits and property set, like the other five, feeds a 26 percent share of the grade, with full computations expected. On credits, they check eligibility, expense limits, rates and phase-outs and the order in which credits reduce tax. On property, they look for correct amount realized after selling costs, adjusted basis including improvements, the home sale exclusion applied with the ownership and use tests, recognized gain in an exchange limited to boot and the right basis for inherited and gifted property, including the dual basis rule. Stating the holding period and character of each gain prepares the work for capital gain netting. Noting which credits are refundable and which only reduce tax to zero adds precision mentors notice.
ACC 4210 Module 5 help from the desk
Property problems go wrong when basis is wrong. Add improvements and subtract depreciation; subtract selling costs from the sale price to get amount realized. In a like-kind exchange, recognized gain is the lesser of boot received or realized gain, and the new property's basis carries the deferred gain. Inherited property takes its value at death and is always long term. Gifted property that has declined in value needs the dual basis test. For credits, check the dependent care expense limit and the age limit for the child tax credit. Your assigned credit and basis problems can be solved in these tables by a writer; ask for the free first sample. Record the holding period of every asset you compute gain on, since the next module depends on it.
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ACC 4210 Module 5 questions, answered
Where can I find a free ACC 4210 Module 5 sample paper?
Scroll up for the completed credits and property work: three credits applied to a household's 2024 tax, then five property transactions with realized and recognized gain worked out.
How much home sale gain can be excluded?
A single filer keeps as much as $250,000 of gain tax free and joint filers as much as $500,000, provided the house was the seller's main residence, and owned by the seller, for two years within the five-year window that ends on the sale date.
How is gain recognized in a like-kind exchange?
Realized gain is recognized only to the extent of boot received, such as cash, and the rest is deferred in the basis of the new property.
What is the basis of inherited property?
Its market value as of the date of death, and the heir's holding period is treated as long term even if the sale comes a week later.
What is the dual basis rule for gifts?
If a gift was worth less than the giver paid when it changed hands, the new owner measures gains from the giver's cost and losses from the lower gift-date value, and a sale in between yields neither.