Question 1

Gift property (disregarding any adjustment for gift tax paid by the donor):

Accepted Answer

A)  Has no basis to the donee because he or she did not pay anything for the property. 
B)  Has the same basis to the donee as the donor's adjusted basis if the donee disposes of the property at a gain. 
C)  Has the same basis to the donee as the donor's adjusted basis if the donee disposes of the property at a loss, and the fair market value on the date of gift was less than the donor's adjusted basis. 
D)  Has no basis to the donee if the fair market value on the date of gift is less than the donor's adjusted basis. 
E)  None of the above. 
A)  Has no basis to the donee because he or she did not pay anything for the property. 
B)  Has the same basis to the donee as the donor's adjusted basis if the donee disposes of the property at a gain. 
C)  Has the same basis to the donee as the donor's adjusted basis if the donee disposes of the property at a loss, and the fair market value on the date of gift was less than the donor's adjusted basis. 
D)  Has no basis to the donee if the fair market value on the date of gift is less than the donor's adjusted basis. 
E)  None of the above.

Question 2

The surrender of depreciated boot (fair market value is less than adjusted basis) in a like-kind exchange can result in the recognition of loss.

Accepted Answer

A) True 
 B)False

Question 3

Karen owns City of Richmond bonds with a face value of $10,000. She purchased the bonds on January 1, 2018, for $11,000. The maturity date is December 31, 2027. The annual interest rate is 4%. What is the amount of taxable interest income that Karen should report for 2018, and the adjusted basis for the bonds at the end of 2018, assuming straight-line amortization is appropriate?

Accepted Answer

A)  $0 and $11,000 
B)  $0 and $10,900 
C)  $100 and $11,000 
D)  $100 and $10,900 
E)  None of the above 
A)  $0 and $11,000 
B)  $0 and $10,900 
C)  $100 and $11,000 
D)  $100 and $10,900 
E)  None of the above

Question 4

The basis of personal use property converted to business use is:

Accepted Answer

A)  Always the lower of its adjusted basis or fair market value on the date of conversion. 
B)  Always its adjusted basis on the date of conversion. 
C)  Always its fair market value on the date of conversion. 
D)  Always the higher of its adjusted basis or fair market value on the date of conversion. 
E)  None of the above. 
A)  Always the lower of its adjusted basis or fair market value on the date of conversion. 
B)  Always its adjusted basis on the date of conversion. 
C)  Always its fair market value on the date of conversion. 
D)  Always the higher of its adjusted basis or fair market value on the date of conversion. 
E)  None of the above.

Question 5

Yolanda buys a house in the mountains for $450,000 which she uses as her personal vacation home. She builds an additional room on the house for $40,000. She sells the property for $560,000 and pays $28,000 in commissions and $4,000 in legal fees in connection with the sale. What is the recognized gain or loss on the sale of the house?

Accepted Answer

A)  $0 
B)  $38,000 
C)  $70,000 
D)  $110,000 
E)  None of the above 
A)  $0 
B)  $38,000 
C)  $70,000 
D)  $110,000 
E)  None of the above

Gift property (disregarding any adjustment for gift tax paid by the donor):

The surrender of depreciated boot (fair market value is less than adjusted basis) in a like-kind exchange can result in the recognition of loss.

The basis of personal use property converted to business use is:

An Introduction to Taxation and Understanding the Federal Tax Law

Working with the Tax Law

Computing the Tax

Gross Income: Concepts and Inclusions

Gross Income: Exclusions

Deductions and Losses: In General

Deductions and Losses: Certain Business Expenses and Losses

Depreciation, Cost Recovery, Amortization, and Depletion

Deductions: Employee and Self-Employed-Related Expenses

Deductions and Losses: Certain Itemized Deductions

Investor Losses

Tax Credits and Payments

Property Transactions: Capital Gains and Losses, Section 1231, and Recapture Provisions

Taxing Business Income

Accounting Periods and Methods

Corporations: Introduction and Operating Rules

Corporations: Organization and Capital Structure

Corporations: Distributions Not in Complete Liquidation

Corporations: Distributions in Complete Liquidation and an Overview of Reorganizations

Partnerships

S Corporations

Exempt Entities

Multistate Corporate Taxation

Taxation of International Transactions

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Income Taxation of Trusts and Estates

Filters

Exam 13: Property Transactions: Determination of Gain or Loss, Basis Considerations, and Nontaxable Exchanges

Gift property (disregarding any adjustment for gift tax paid by the donor):

The surrender of depreciated boot (fair market value is less than adjusted basis) in a like-kind exchange can result in the recognition of loss.

The basis of personal use property converted to business use is:

An Introduction to Taxation and Understanding the Federal Tax Law

Working with the Tax Law

Computing the Tax

Gross Income: Concepts and Inclusions

Gross Income: Exclusions

Deductions and Losses: In General

Deductions and Losses: Certain Business Expenses and Losses

Depreciation, Cost Recovery, Amortization, and Depletion

Deductions: Employee and Self-Employed-Related Expenses

Deductions and Losses: Certain Itemized Deductions

Investor Losses

Tax Credits and Payments

Property Transactions: Capital Gains and Losses, Section 1231, and Recapture Provisions

Taxing Business Income

Accounting Periods and Methods

Corporations: Introduction and Operating Rules

Corporations: Organization and Capital Structure

Corporations: Distributions Not in Complete Liquidation

Corporations: Distributions in Complete Liquidation and an Overview of Reorganizations

Partnerships

S Corporations

Exempt Entities

Multistate Corporate Taxation

Taxation of International Transactions

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Income Taxation of Trusts and Estates

Filters