Exam 10: Property Dispositions

Bozeman sold equipment that it uses in its business for $80,000. Bozeman bought the equipment two years ago for $75,000 and has claimed $20,000 of depreciation expense. What is the amount and character of Bozeman's gain or loss?

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.

Redoubt LLC traded machinery used in its business to a machinery dealer for some new machinery. Redoubt originally purchased the machinery for $80,000 and it had an adjusted basis of $53,000 at the time of the exchange. The new machinery had a fair market value of $62,000. Redoubt also received $7,000 of computer equipment in the transaction. What is Redoubt's gain or loss recognized on the exchange?

Which of the following does not ultimately result in a capital gain or loss?

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

Boot is not like-kind property involved in a like-kind exchange.

For corporations, §291 recaptures 20 percent of the lesser of depreciation taken or the realized gain as ordinary income.

Which of the following is true regarding depreciation recapture?

Which of the following results in an ordinary gain or loss?

Unrecaptured §1250 gain is taxed at a maximum rate of 25 percent.