Question 1

The ownership test for the sale of a personal residence states:

Accepted Answer

A) That a taxpayer must have lived in the home for at least two years. 
B) That a taxpayer be the original owner of the residence. 
C) That a taxpayer must have owned the home for at least two years. 
D) None of these. 
A) That a taxpayer must have lived in the home for at least two years. 
B) That a taxpayer be the original owner of the residence. 
C) That a taxpayer must have owned the home for at least two years. 
D) None of these.

Question 2

If a taxpayer trades a personal-use asset for another asset,the exchange does not qualify as a like-kind exchange.

Accepted Answer

A) True 
 B)False

Question 3

Matt and Opal were married in April of 2016.Matt has lived in his personal residence for fifteen years and Opal moved into the house after the marriage.Matt died in October 2016.Opal sold the house at a $300,000 gain in December,2016.How much of the gain can Opal exclude?

Accepted Answer

A) $250,000. 
B) $300,000. 
C) $0. 
D) None of these. 
A) $250,000. 
B) $300,000. 
C) $0. 
D) None of these.

Question 4

When a loss is disallowed under the related party loss rules,the loss:

Accepted Answer

A) Reduces the subsequent gain when the related party sells the asset. 
B) Is carried forward indefinitely. 
C) Is lost forever even if the related party sells the asset at a gain. 
D) None of these. 
A) Reduces the subsequent gain when the related party sells the asset. 
B) Is carried forward indefinitely. 
C) Is lost forever even if the related party sells the asset at a gain. 
D) None of these.

Question 5

The contract price in an installment sale is:

Accepted Answer

A) The gross profit divided by the selling price. 
B) The selling price less the basis in the property. 
C) The selling price or the selling price reduced by any debt assumed by the buyer. 
D) The selling price less any selling expenses. 
A) The gross profit divided by the selling price. 
B) The selling price less the basis in the property. 
C) The selling price or the selling price reduced by any debt assumed by the buyer. 
D) The selling price less any selling expenses.

Question 6

An apartment building with an adjusted basis of $500,000 was destroyed by a tornado on April 30,2016.On May 10,2016,the insurance company paid the owner $695,000.The owner reinvested $570,000 in a new apartment complex.What is the basis of the new complex if non-recognition of gain from an involuntary conversion is elected?

Accepted Answer

A) $570,000. 
B) $625,000. 
C) $500,000. 
D) $695,000. 
A) $570,000. 
B) $625,000. 
C) $500,000. 
D) $695,000.

Question 7

The time period to replace property destroyed in an involuntary conversion is two years from the event.

Accepted Answer

A) True 
 B)False

Question 8

On an involuntary conversion,gain is recognized to the extent of the lower of gain realized or the proceeds not used for replacement.

Accepted Answer

A) True 
 B)False

Question 9

Jasmine sold land for $250,000 in 2016.The land had a basis of $118,000 and she incurred selling expenses of $10,000.Jasmine received $50,000 cash down in 2016 and will receive five additional annual payments of $40,000 each.What is Jasmine's gross profit percentage on the sale?

Accepted Answer

A) 48.8%. 
B) 47.2%. 
C) 100.0%. 
D) 51.2%. 
A) 48.8%. 
B) 47.2%. 
C) 100.0%. 
D) 51.2%.

Question 10

A dealer of equipment can recognize gains using the installment method.

Accepted Answer

A) True 
 B)False

Question 11

Laverne exchanges a rental beach house with an adjusted basis of $400,000 and fair market value of $320,000 for a mini-storage building with a fair market value of $200,000 plus $120,000 cash.What is the recognized gain or loss on the exchange and the basis of the mini-storage building?

Accepted Answer

Since the assets are not like-kind,the l

Question 12

On June 15,2016,Roco sold land held for investment to Scotty for $100,000 cash and an installment note of $500,000 payable in five equal annual installments beginning on June 15,2017,plus interest at 10%.Roco's basis in the land is $300,000.What amount of gain is recognized in 2016 under the installment method?

Accepted Answer

$50,000 re

Question 13

Exchange of one partnership interest for another partnership interest qualifies as a like-kind exchange.

Accepted Answer

A) True 
 B)False

Question 14

The replacement period for an involuntary conversion always ends two years after the close of the first taxable year in which any part of the gain is realized.

Accepted Answer

A) True 
 B)False

Question 15

An involuntary conversion results in money received.If the replacement property is purchased within the two-year period,the basis of the new property is its cost less the deferred gain.

Accepted Answer

A) True 
 B)False

The ownership test for the sale of a personal residence states:

If a taxpayer trades a personal-use asset for another asset,the exchange does not qualify as a like-kind exchange.

Matt and Opal were married in April of 2016.Matt has lived in his personal residence for fifteen years and Opal moved into the house after the marriage.Matt died in October 2016.Opal sold the house at a $300,000 gain in December,2016.How much of the gain can Opal exclude?

When a loss is disallowed under the related party loss rules,the loss:

The contract price in an installment sale is:

The time period to replace property destroyed in an involuntary conversion is two years from the event.

On an involuntary conversion,gain is recognized to the extent of the lower of gain realized or the proceeds not used for replacement.

Jasmine sold land for $250,000 in 2016.The land had a basis of $118,000 and she incurred selling expenses of $10,000.Jasmine received $50,000 cash down in 2016 and will receive five additional annual payments of $40,000 each.What is Jasmine's gross profit percentage on the sale?

A dealer of equipment can recognize gains using the installment method.

Laverne exchanges a rental beach house with an adjusted basis of $400,000 and fair market value of $320,000 for a mini-storage building with a fair market value of $200,000 plus $120,000 cash.What is the recognized gain or loss on the exchange and the basis of the mini-storage building?

Exchange of one partnership interest for another partnership interest qualifies as a like-kind exchange.

The replacement period for an involuntary conversion always ends two years after the close of the first taxable year in which any part of the gain is realized.

An involuntary conversion results in money received.If the replacement property is purchased within the two-year period,the basis of the new property is its cost less the deferred gain.

Introduction to Taxation, the Income Tax Formula, and Form 1040ez

Expanded Tax Formula, forms 1040a and 1040, and Basic Concepts

Gross Income: Inclusions and Exclusions

Adjustments for Adjusted Gross Income

Itemized Deductions

Self-Employed Business Income Line 12 of Form 1040 and Schedule C

Capital Gains and Other Sales of Property Schedule D and Form 4797

Rental Property, royalties, and Income From Flow-Through Entities Line 17, form 1040, and Schedule E

Tax Credits Form 1040, lines 46 Through 54 and Lines 66a Through 73

Payroll Taxes

Retirement and Other Tax-Deferred Plans and Annuities

At-Riskpassive Activity Loss Rules and the Individual Alternative Minimum Tax

Partnership Taxation

Corporate Taxation

Filters

Exam 12: Special Property Transactions

The ownership test for the sale of a personal residence states:

If a taxpayer trades a personal-use asset for another asset,the exchange does not qualify as a like-kind exchange.

Matt and Opal were married in April of 2016.Matt has lived in his personal residence for fifteen years and Opal moved into the house after the marriage.Matt died in October 2016.Opal sold the house at a $300,000 gain in December,2016.How much of the gain can Opal exclude?

When a loss is disallowed under the related party loss rules,the loss:

The contract price in an installment sale is:

The time period to replace property destroyed in an involuntary conversion is two years from the event.

On an involuntary conversion,gain is recognized to the extent of the lower of gain realized or the proceeds not used for replacement.

Jasmine sold land for $250,000 in 2016.The land had a basis of $118,000 and she incurred selling expenses of $10,000.Jasmine received $50,000 cash down in 2016 and will receive five additional annual payments of $40,000 each.What is Jasmine's gross profit percentage on the sale?

A dealer of equipment can recognize gains using the installment method.

Laverne exchanges a rental beach house with an adjusted basis of $400,000 and fair market value of $320,000 for a mini-storage building with a fair market value of $200,000 plus $120,000 cash.What is the recognized gain or loss on the exchange and the basis of the mini-storage building?

Exchange of one partnership interest for another partnership interest qualifies as a like-kind exchange.

The replacement period for an involuntary conversion always ends two years after the close of the first taxable year in which any part of the gain is realized.

An involuntary conversion results in money received.If the replacement property is purchased within the two-year period,the basis of the new property is its cost less the deferred gain.

Introduction to Taxation, the Income Tax Formula, and Form 1040ez

Expanded Tax Formula, forms 1040a and 1040, and Basic Concepts

Gross Income: Inclusions and Exclusions

Adjustments for Adjusted Gross Income

Itemized Deductions

Self-Employed Business Income Line 12 of Form 1040 and Schedule C

Capital Gains and Other Sales of Property Schedule D and Form 4797

Rental Property, royalties, and Income From Flow-Through Entities Line 17, form 1040, and Schedule E

Tax Credits Form 1040, lines 46 Through 54 and Lines 66a Through 73

Payroll Taxes

Retirement and Other Tax-Deferred Plans and Annuities

At-Riskpassive Activity Loss Rules and the Individual Alternative Minimum Tax

Partnership Taxation

Corporate Taxation

Filters