Question 1

Which of the following is not true regarding installment sales?

Accepted Answer

A)  Only gains are eligible for installment sale reporting. 
B)  Depreciation recapture is deferred in an installment sale. 
C)  The gross profit percentage is needed to determine the annual gain recognized. 
D)  Stock sales are ineligible for installment sale treatment. 
E)  None of the choices are correct. 
A)  Only gains are eligible for installment sale reporting. 
B)  Depreciation recapture is deferred in an installment sale. 
C)  The gross profit percentage is needed to determine the annual gain recognized. 
D)  Stock sales are ineligible for installment sale treatment. 
E)  None of the choices are correct. B

Question 2

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. 
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. A

Question 3

A taxpayer that receives boot in a like-kind exchange resulting in a gain recognizes as gain the lesser of the fair market value of the boot received or the gain realized.

Accepted Answer

A) True 
 B)False  True

Question 4

Depreciation recapture changes both the amount and character of a gain.

Accepted Answer

A) True 
 B)False

Question 5

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

Question 6

The sale of land held for investment 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. 
A)  Capital. 
B)  Ordinary. 
C)  §1231. 
D)  §1245. 
E)  None of the choices are correct.

Question 7

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. 
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.

Question 8

Misha traded computer equipment used in her business to a computer dealer for some new computer equipment. Misha originally purchased the computer equipment for $15,000, and it had an adjusted basis of $11,000 at the time of the exchange.The computer equipment was worth $12,000 at the time of the exchange. Misha also received a used copier worth $2,000 in the transaction. What is Misha's realized and recognized gain/loss on the exchange?

Accepted Answer

$3,000 realized and recognized gain.
The

Question 9

§1231 assets include all assets used in a trade or business.

Accepted Answer

A) True 
 B)False

Question 10

In the current year, Raven sold machinery with a fair market value of $200,000. The machinery's original basis was $190,000 and Raven's accumulated depreciation on the machinery was $40,000, so its adjusted basis to Raven was $150,000. Raven received $50,000 in the current year and a note paying Raven $75,000 a year for two years beginning next year. What is the amount and character of the gain that Raven will recognize in the current year?

Accepted Answer

$42,500 gain recognized: $40,000 ordinar

Question 11

Explain whether the saleat a loss of a machine used in a trade or business generates an ordinary or capital loss?

Accepted Answer

The sale at a loss of a machine used in

Question 12

Brandy sold a rental house that she owned for $150,000. Brandy bought the house four years ago for $140,000 and has claimed $25,000 of depreciation expense. What is the amount and character of Brandy's gain or loss?

Accepted Answer

$10,000 §1231 gain and $25,000 unrecaptu

Question 13

Frederique sold furniture that she uses in her business for $15,000. Frederique bought the furniture a few years ago for $40,000 and has claimed $20,000 of depreciation expense. What is the amount and character of Frederique's gain or loss?

Accepted Answer

$5,000 §1231 loss.
T

Question 14

§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

Question 15

Frederique sold furniture that she uses in her business for $15,250. Frederique bought the furniture a few years ago for $39,950 and has claimed $20,050 of depreciation expense. What is the amount and character of Frederique's gain or loss?

Accepted Answer

${{[a(5)]:#,###}} §1231 loss.

Question 16

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. 
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.

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

An installment sale is any sale where at least a portion of the sale proceeds is received in a subsequent taxable year.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following sections does not recapture or recharacterize a taxpayer's gain?

Accepted Answer

A)  §1239. 
B)  §1250. 
C)  §1245. 
D)  §291. 
E)  None of the choices are correct. 
A)  §1239. 
B)  §1250. 
C)  §1245. 
D)  §291. 
E)  None of the choices are correct.

Question 20

A simultaneous exchange must take place for a transaction to qualify as a like-kind exchange.

Accepted Answer

A) True 
 B)False

Which of the following is not true regarding installment sales?

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

A taxpayer that receives boot in a like-kind exchange resulting in a gain recognizes as gain the lesser of the fair market value of the boot received or the gain realized.

Depreciation recapture changes both the amount and character of a gain.

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?

The sale of land held for investment results in which of the following types of gain or loss?

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

§1231 assets include all assets used in a trade or business.

Explain whether the saleat a loss of a machine used in a trade or business generates an ordinary or capital loss?

Brandy sold a rental house that she owned for $150,000. Brandy bought the house four years ago for $140,000 and has claimed $25,000 of depreciation expense. What is the amount and character of Brandy's gain or loss?

Frederique sold furniture that she uses in her business for $15,000. Frederique bought the furniture a few years ago for $40,000 and has claimed $20,000 of depreciation expense. What is the amount and character of Frederique's gain or loss?

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

Frederique sold furniture that she uses in her business for $15,250. Frederique bought the furniture a few years ago for $39,950 and has claimed $20,050 of depreciation expense. What is the amount and character of Frederique's gain or loss?

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

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

An installment sale is any sale where at least a portion of the sale proceeds is received in a subsequent taxable year.

Which of the following sections does not recapture or recharacterize a taxpayer's gain?

A simultaneous exchange must take place for a transaction to qualify as a like-kind exchange.

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Business Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Non-Liquidating Distributions

Corporate Formation, Reorganization, and Liquidation

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

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Exam 3: Property Dispositions

Which of the following is not true regarding installment sales?

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

A taxpayer that receives boot in a like-kind exchange resulting in a gain recognizes as gain the lesser of the fair market value of the boot received or the gain realized.

Depreciation recapture changes both the amount and character of a gain.

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?

The sale of land held for investment results in which of the following types of gain or loss?

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

§1231 assets include all assets used in a trade or business.

Explain whether the saleat a loss of a machine used in a trade or business generates an ordinary or capital loss?

Brandy sold a rental house that she owned for $150,000. Brandy bought the house four years ago for $140,000 and has claimed $25,000 of depreciation expense. What is the amount and character of Brandy's gain or loss?

Frederique sold furniture that she uses in her business for $15,000. Frederique bought the furniture a few years ago for $40,000 and has claimed $20,000 of depreciation expense. What is the amount and character of Frederique's gain or loss?

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

Frederique sold furniture that she uses in her business for $15,250. Frederique bought the furniture a few years ago for $39,950 and has claimed $20,050 of depreciation expense. What is the amount and character of Frederique's gain or loss?

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

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

An installment sale is any sale where at least a portion of the sale proceeds is received in a subsequent taxable year.

Which of the following sections does not recapture or recharacterize a taxpayer's gain?

A simultaneous exchange must take place for a transaction to qualify as a like-kind exchange.

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Business Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Non-Liquidating Distributions

Corporate Formation, Reorganization, and Liquidation

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

State and Local Taxes

The Us Taxation of Multinational Transactions

Transfer Taxes and Wealth Planning

Filters