Question 1

A deferred like-kind exchange does not help accomplish which of the following objectives?

Accepted Answer

A)  To facilitate finding replacement property.
B)  To help acquire the replacement property.
C)  To reduce the possibility that the seller must receive cash (boot) that will taint the transaction.
D)  To certify the taxpayer's Form 8824-Like-kind exchanges.
E)  All of the choices are correct.F) A) and C)
G) A) and E)

Question 2

Arlington LLC exchanged land used in its business for some new land. Arlington originally purchased the land it exchanged for $28,000. The new land had a fair market value of $35,000. Arlington also received $2,000 of office equipment in the transaction. What is Arlington'srecognized gain or loss on the exchange?

Accepted Answer

A)  $0.
B)  $2,000.
C)  $7,000.
D)  $9,000.
E)  None of the choices are correct.F) B) and E)
G) A) and B)

Question 3

§1239 recharacterizes 50 percent of the gain on sales to a related party as ordinary income.

Accepted Answer

A) True 
 B)False

Question 4

Why does §1250 recapture generally no longer apply?

Accepted Answer

A)  Congress repealed the code section.
B)  Real property is depreciated using the straight-line method after 1986.
C)  §1245 recapture trumps §1250 recapture.
D)  Because unrecaptured §1250 gains now apply to all taxpayers instead.
E)  None of the choices are correct.F) A) and B)
G) A) and C)

Question 5

The sale of computer equipment used in a trade or business for nine months results in which of the following types of gain or loss?

Accepted Answer

A)  Capital.
B)  Ordinary.
C)  §1231.
D)  §1245.
E)  None of the choices are correct.F) D) and E)
G) A) and B)

Question 6

The §1231 look-back rule applies whether there is a net gain or loss.

Accepted Answer

A) True 
 B)False

Question 7

Which one of the following is not true regarding a like-kind exchange?

Accepted Answer

A)  Loss on like-kind property is not recognized.
B)  Gains on boot given are deferred.
C)  Losses on boot given are not recognized.
D)  Land can be like-kind with a building.
E)  All of the choices are true.F) A) and B)
G) B) and C)

Question 8

Kristi had a business building destroyed in an earthquake. The old building was purchased for $259,500, and $81,900 of depreciation deductions had been taken. Her insurance proceeds were $554,750. Although the replacement property was much larger and nicer than her old building, Kristi's new property qualified as replacement property. She acquired the new property 13 months after the earthquake for $621,900. What is the amount of Kristi's realized gain and recognized gain and the basis in her new property?

Accepted Answer

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Question 9

Generally, the amount realized is everything of value received in a sale less selling expenses.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is true regarding depreciation recapture?

Accepted Answer

A)  Changes the character of a loss.
B)  Changes the character of a gain.
C)  Changes the amount of a gain.
D)  Only applies to ordinary assets.
E)  None of the choices are correct.F) None of the above
G) C) and D)

Question 11

Which one of the following is not a requirement of a deferred like-kind exchange?

Accepted Answer

A)  The like-kind property to be received must be identified within 45 days.
B)  The exchange must be completed within the taxable year.
C)  The like-kind property must be received within 180 days.
D)  The exchanged property must be like-kind.
E)  All of the choices are correct.F) All of the above
G) C) and D)

Question 12

The gain or loss realized on the sale of an asset is always recognized for tax purposes.

Accepted Answer

A) True 
 B)False

Question 13

How long after the initial exchange does a taxpayer have to identify replacement property in a like-kind exchange?

Accepted Answer

A)  The like-kind property to be received must be identified within 45 days.
B)  The like-kind property to be received must be identified by the earlier of 45 days or the last day of the taxpayer's taxable year.
C)  The like-kind property to be received must be identified within 180 days.
D)  There is no deadline for the identification of replacement property.
E)  All of the choices are correct.F) B) and C)
G) B) and D)

Question 14

Ashburn reported a $104,875 net §1231 gain in Year 6. Assuming Ashburn reported $52,500 of nonrecaptured §1231 losses during Years 1 to 5, what amount of Ashburn's net §1231 gain for Year 6, if any, is treated as ordinary income?

Accepted Answer

A)  $0.
B)  $52,375.
C)  $52,500.
D)  $104,875.
E)  None of the choices are correct.F) B) and E)
G) C) and D)

Question 15

The saleat a loss of machinery that was used in a trade or business and held for more than one year results in which of the following types of loss?

Accepted Answer

A)  Capital.
B)  §291.
C)  §1231.
D)  §1245.
E)  None of the choices are correct.F) C) and E)
G) C) and D)

Question 16

Which of the following may qualify as an installment sale?

Accepted Answer

A)  Sale of inventory at a gain.
B)  Sale of securities.
C)  Sale of asset used in a business at a gain.
D)  Land sold at a loss.
E)  All of the choices qualify for installment sale treatment.F) A) and B)
G) A) and C)

Question 17

Luke sold land valued at $210,100. His original basis in the land was $179,950. For the land, Luke received $60,100 in cash in the current year and a note providing $150,000 in the subsequent year. What is Luke's recognized gain in the current and subsequent year, respectively? (Do not round intermediate values. Round final values to whole number.)

Accepted Answer

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Question 18

Manassas purchased a computer several years ago for $2,600. On November 10th of the current year, the computer was worth $ 880. If $1,080 of depreciation deductions had been taken, what is Manassas's tax-adjusted basis for the computer?

Accepted Answer

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Question 19

Sadie sold 10 shares of stock to her brother, George, for $590 16 months ago. Sadie had purchased the stock for $780 two years earlier. If George sells the stock for $970, what are the amount and character of his recognized gain or loss in the current year?

Accepted Answer

A)  $0.
B)  $190 short-term capital gain.
C)  $190 long-term capital gain.
D)  $380 short-term capital gain.
E)  None of the choices are correct.F) C) and E)
G) B) and D)

Question 20

§1250 recaptures the excess of accelerated depreciation over straight-line depreciation on real property placed in servicebefore 1987 as ordinary income.

Accepted Answer

A) True 
 B)False

Exam 11: Property Dispositions

Which one of the following is not true regarding a like-kind exchange?

Correct Answer
verified

Which of the following is true regarding depreciation recapture?

Correct Answer
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Correct Answer
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${{[a(7)]:#,###}} gain recognized in the...
View Answer

How long after the initial exchange does a taxpayer have to identify replacement property in a like-kind exchange?

Correct Answer
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Which one of the following is not a requirement of a deferred like-kind exchange?

Correct Answer
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Correct Answer
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${{[a(6)]:#,###}} realized gain, $0 reco...
View Answer

Why does §1250 recapture generally no longer apply?

Correct Answer
verified

The gain or loss realized on the sale of an asset is always recognized for tax purposes.

Correct Answer
verified

§1239 recharacterizes 50 percent of the gain on sales to a related party as ordinary income.

Correct Answer
verified

Which of the following may qualify as an installment sale?

Correct Answer
verified

Correct Answer
verified

§1250 recaptures the excess of accelerated depreciation over straight-line depreciation on real property placed in servicebefore 1987 as ordinary income.

Correct Answer
verified

The saleat a loss of machinery that was used in a trade or business and held for more than one year results in which of the following types of loss?

Correct Answer
verified

The §1231 look-back rule applies whether there is a net gain or loss.

Correct Answer
verified

A deferred like-kind exchange does not help accomplish which of the following objectives?

Correct Answer
verified

Ashburn reported a $104,875 net §1231 gain in Year 6. Assuming Ashburn reported $52,500 of nonrecaptured §1231 losses during Years 1 to 5, what amount of Ashburn's net §1231 gain for Year 6, if any, is treated as ordinary income?

Correct Answer
verified

Sadie sold 10 shares of stock to her brother, George, for $590 16 months ago. Sadie had purchased the stock for $780 two years earlier. If George sells the stock for $970, what are the amount and character of his recognized gain or loss in the current year?

Correct Answer
verified

Generally, the amount realized is everything of value received in a sale less selling expenses.

Correct Answer
verified

Manassas purchased a computer several years ago for $2,600. On November 10^th of the current year, the computer was worth $ 880. If $1,080 of depreciation deductions had been taken, what is Manassas's tax-adjusted basis for the computer?

Correct Answer
verified
${{[a(4)]:#,###}}.
The adjuste...
View Answer

The sale of computer equipment used in a trade or business for nine months results in which of the following types of gain or loss?

Correct Answer
verified

Exam 11: Property Dispositions

Which one of the following is not true regarding a like-kind exchange?

Correct AnswerverifiedShow Answer

Which of the following is true regarding depreciation recapture?

Correct AnswerverifiedShow Answer

Correct Answerverified${{[a(7)]:#,###}} gain recognized in the...View AnswerShow Answer

How long after the initial exchange does a taxpayer have to identify replacement property in a like-kind exchange?

Correct AnswerverifiedShow Answer

Which one of the following is not a requirement of a deferred like-kind exchange?

Correct AnswerverifiedShow Answer

Correct Answerverified${{[a(6)]:#,###}} realized gain, $0 reco...View AnswerShow Answer

Why does §1250 recapture generally no longer apply?

Correct AnswerverifiedShow Answer

The gain or loss realized on the sale of an asset is always recognized for tax purposes.

Correct AnswerverifiedShow Answer

§1239 recharacterizes 50 percent of the gain on sales to a related party as ordinary income.

Correct AnswerverifiedShow Answer

Which of the following may qualify as an installment sale?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

§1250 recaptures the excess of accelerated depreciation over straight-line depreciation on real property placed in servicebefore 1987 as ordinary income.

Correct AnswerverifiedShow Answer

The saleat a loss of machinery that was used in a trade or business and held for more than one year results in which of the following types of loss?

Correct AnswerverifiedShow Answer

The §1231 look-back rule applies whether there is a net gain or loss.

Correct AnswerverifiedShow Answer

A deferred like-kind exchange does not help accomplish which of the following objectives?

Correct AnswerverifiedShow Answer

Ashburn reported a $104,875 net §1231 gain in Year 6. Assuming Ashburn reported $52,500 of nonrecaptured §1231 losses during Years 1 to 5, what amount of Ashburn's net §1231 gain for Year 6, if any, is treated as ordinary income?

Correct AnswerverifiedShow Answer

Sadie sold 10 shares of stock to her brother, George, for $590 16 months ago. Sadie had purchased the stock for $780 two years earlier. If George sells the stock for $970, what are the amount and character of his recognized gain or loss in the current year?

Correct AnswerverifiedShow Answer

Generally, the amount realized is everything of value received in a sale less selling expenses.

Correct AnswerverifiedShow Answer

Manassas purchased a computer several years ago for $2,600. On November 10th of the current year, the computer was worth $ 880. If $1,080 of depreciation deductions had been taken, what is Manassas's tax-adjusted basis for the computer?

Correct Answerverified${{[a(4)]:#,###}}.The adjuste...View AnswerShow Answer

The sale of computer equipment used in a trade or business for nine months results in which of the following types of gain or loss?

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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${{[a(7)]:#,###}} gain recognized in the...
View Answer

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${{[a(6)]:#,###}} realized gain, $0 reco...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Manassas purchased a computer several years ago for $2,600. On November 10^th of the current year, the computer was worth $ 880. If $1,080 of depreciation deductions had been taken, what is Manassas's tax-adjusted basis for the computer?

Correct Answer
verified
${{[a(4)]:#,###}}.
The adjuste...
View Answer

Correct Answer
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