Exam 10: Property Dispositions

Suzanne,an individual,began business four years ago and has never sold a §1231 asset.Suzanne owned each of the assets for several years.In the current year,Suzanne sold the following business assets: Accumulated Asset Original Cost Depreciation Gain/Loss Machinery \ 12,000 \ 7,000 \ 6,000 Furniture 10,000 2,000 (3,000) Building 90,000 20,000 15,000 Assuming Suzanne's marginal ordinary income tax rate is 32 percent,what is the character of the gains and losses and what affect do they have on Suzanne's tax liability?

Which of the following transactions results solely in §1245 gain?

Realized gains are recognized unless there is specific exception.

Which of the following sections recaptures or recharacterizes only corporate taxpayer's gains?

Which of the following is not usually included in an asset's tax basis?

Leesburg sold a machine for $2,200 on November 10ᵗʰ of the current year.The machine was purchased for $2,600.Leesburg had taken $1,200 of depreciation deductions on the machine through the date of the sale.What is Leesburg's gain or loss realized on the machine?

Accounts receivable and inventory are examples of ordinary assets.

A loss realized for property destroyed in a hurricane is deferred under the involuntary conversion rules.

A parcel of land is always a capital asset.

Which of the following may qualify as an installment sale?