Question 1

For a like-kind exchange, realized gain is deferred if the exchange is solely for like-kind property.

Accepted Answer

A) True 
 B)False

Question 2

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?

Accepted Answer

$7,000 gain.
Explanation: The gain recog

Question 3

Which of the following is not true regarding an asset's adjusted basis?

Accepted Answer

A)  Tax adjusted basis is usually greater than book adjusted basis. 
B)  Tax adjusted basis is usually less than book adjusted basis. 
C)  Adjusted basis is cost basis less cost recovery deductions. 
D)  Tax adjusted basis may change over time. 
A)  Tax adjusted basis is usually greater than book adjusted basis. 
B)  Tax adjusted basis is usually less than book adjusted basis. 
C)  Adjusted basis is cost basis less cost recovery deductions. 
D)  Tax adjusted basis may change over time.

Question 4

Jessie sold a piece of land held for investment for $250,000. Jessie bought the land two years ago for $195,000. What is the amount and character of Jessie's gain?

Accepted Answer

Capital gain of $55,000.
Expla

Question 5

The sale of machinery at a loss that was used in a trade or business and held for more than one year results in the following type of loss?

Accepted Answer

A)  Capital. 
B)  §291. 
C)  §1231. 
D)  §1245. 
E)  None of these. 
A)  Capital. 
B)  §291. 
C)  §1231. 
D)  §1245. 
E)  None of these.

Question 6

Koch traded machine 1 for machine 2. Koch originally purchased machine 1 for $75,000 and machine 1's adjusted basis was $40,000 at the time of the exchange. Machine 2's seller purchased it for $65,000 and machine 2's adjusted basis was $55,000 at the time of the exchange. What is Koch's adjusted basis in machine 2 after the exchange?

Accepted Answer

A)  $40,000. 
B)  $50,000. 
C)  $55,000. 
D)  $75,000. 
E)  None of these. 
A)  $40,000. 
B)  $50,000. 
C)  $55,000. 
D)  $75,000. 
E)  None of these.

Question 7

Explain whether the sale of a machine used in a trade or business that is sold at a loss generates an ordinary or capital loss?

Accepted Answer

The sale of a machine at a loss generate

Question 8

Each of the following is true except for:

Accepted Answer

A)  A direct involuntary conversion occurs when property taken under imminent domain is replaced with other property. 
B)  Qualified replacement property rules are more restrictive than the like-kind property rules. 
C)  An indirect involuntary conversion occurs when property is destroyed and insurance proceeds are used to purchase qualified replacement property. 
D)  Losses realized in involuntary conversions are deferred. 
E)  All of these are true. 
A)  A direct involuntary conversion occurs when property taken under imminent domain is replaced with other property. 
B)  Qualified replacement property rules are more restrictive than the like-kind property rules. 
C)  An indirect involuntary conversion occurs when property is destroyed and insurance proceeds are used to purchase qualified replacement property. 
D)  Losses realized in involuntary conversions are deferred. 
E)  All of these are true.

Question 9

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

Accepted Answer

A)  Sale of machinery held for less than one year. 
B)  Sale of machinery held for more than one year and where the gain realized exceeds the accumulated depreciation. 
C)  Sale of machinery held for more than one year and where the accumulated depreciation exceeds the gain realized. 
D)  Sale of land held for more than one year and where the amount realized exceeds the adjusted basis. 
E)  None of these. 
A)  Sale of machinery held for less than one year. 
B)  Sale of machinery held for more than one year and where the gain realized exceeds the accumulated depreciation. 
C)  Sale of machinery held for more than one year and where the accumulated depreciation exceeds the gain realized. 
D)  Sale of land held for more than one year and where the amount realized exceeds the adjusted basis. 
E)  None of these.

Question 10

Residential real property is not like-kind with non-residential real property.

Accepted Answer

A) True 
 B)False

Question 11

The gain or loss realized on the sale of an asset is the amount realized less the adjusted basis.

Accepted Answer

A) True 
 B)False

Question 12

The sale of machinery for more than the original cost basis (before depreciation), used in a trade or business, and held for more than one year results in the following types of gain or loss?

Accepted Answer

A)  Capital and Ordinary. 
B)  Ordinary only. 
C)  Capital and §1231. 
D)  §1245 and §1231. 
E)  None of these. 
A)  Capital and Ordinary. 
B)  Ordinary only. 
C)  Capital and §1231. 
D)  §1245 and §1231. 
E)  None of these.

Question 13

The §1231 look-back rule recharacterizes §1231 gains if §1231 losses have created ordinary losses in the last 5 years.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A)  §291. 
B)  §1239. 
C)  §1245. 
D)  Unrecaptured §1250 gains. 
E)  None of these. 
A)  §291. 
B)  §1239. 
C)  §1245. 
D)  Unrecaptured §1250 gains. 
E)  None of these.

Question 15

The sale of computer equipment used in a trade or business for 9 months results in the following type of gain or loss?

Accepted Answer

A)  Capital. 
B)  Ordinary. 
C)  §1231. 
D)  §1245. 
E)  None of these. 
A)  Capital. 
B)  Ordinary. 
C)  §1231. 
D)  §1245. 
E)  None of these.

Question 16

Odintz traded machinery for machinery. Odintz originally purchased its machine for $150,000 and the adjusted basis was $90,000 at the time of the exchange. The machinery received was purchased for $200,000, had an adjusted basis of $155,000 at the time of the exchange, and was subject to a mortgage of $50,000 that was paid off before the transfer. What is Odintz's adjusted basis in the new machinery after the exchange?

Accepted Answer

$90,000.
Explanation: The exch

Question 17

Which of the following is how gain or loss realized is calculated?

Accepted Answer

A)  Cash less selling costs. 
B)  Cost basis less cost recovery. 
C)  Cash less cost recovery. 
D)  Amount realized less adjusted basis. 
E)  None of these. 
A)  Cash less selling costs. 
B)  Cost basis less cost recovery. 
C)  Cash less cost recovery. 
D)  Amount realized less adjusted basis. 
E)  None of these.

Question 18

Which of the following is not a §1245 asset if held for more than one year?

Accepted Answer

A)  Machinery. 
B)  Automobile. 
C)  Computer. 
D)  Land. 
E)  None of these. 
A)  Machinery. 
B)  Automobile. 
C)  Computer. 
D)  Land. 
E)  None of these.

Question 19

Ordinary gains and losses are obtained on the sale of investments.

Accepted Answer

A) True 
 B)False

Question 20

Generally, the amount realized is everything of value received in a sale less selling expenses.

Accepted Answer

A) True 
 B)False

For a like-kind exchange, realized gain is deferred if the exchange is solely for like-kind property.

Which of the following is not true regarding an asset's adjusted basis?

Jessie sold a piece of land held for investment for $250,000. Jessie bought the land two years ago for $195,000. What is the amount and character of Jessie's gain?

The sale of machinery at a loss that was used in a trade or business and held for more than one year results in the following type of loss?

Explain whether the sale of a machine used in a trade or business that is sold at a loss generates an ordinary or capital loss?

Each of the following is true except for:

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

Residential real property is not like-kind with non-residential real property.

The gain or loss realized on the sale of an asset is the amount realized less the adjusted basis.

The sale of machinery for more than the original cost basis (before depreciation), used in a trade or business, and held for more than one year results in the following types of gain or loss?

The §1231 look-back rule recharacterizes §1231 gains if §1231 losses have created ordinary losses in the last 5 years.

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

The sale of computer equipment used in a trade or business for 9 months results in the following type of gain or loss?

Which of the following is how gain or loss realized is calculated?

Which of the following is not a §1245 asset if held for more than one year?

Ordinary gains and losses are obtained on the sale of investments.

Generally, the amount realized is everything of value received in a sale less selling expenses.

An Introduction to Tax

Tax Compliance , the Irs, and Tax Authorities

Tax Planning Strategies and Related Limitations

Individual Income Tax Overview, Exemptions, and Filing Status

Gross Income and Exclusions

Individual for Agi Deductions

Individual From Agi Deductions

Individual Income Tax Computation and Tax Credits

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Entities Overview

Corporate Formations and Operations

Corporate Nonliquidating and Liquidating Distributions

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S: Corporations

Filters

Exam 11: Property Dispositions

For a like-kind exchange, realized gain is deferred if the exchange is solely for like-kind property.

Which of the following is not true regarding an asset's adjusted basis?

Jessie sold a piece of land held for investment for $250,000. Jessie bought the land two years ago for $195,000. What is the amount and character of Jessie's gain?

The sale of machinery at a loss that was used in a trade or business and held for more than one year results in the following type of loss?

Explain whether the sale of a machine used in a trade or business that is sold at a loss generates an ordinary or capital loss?

Each of the following is true except for:

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

Residential real property is not like-kind with non-residential real property.

The gain or loss realized on the sale of an asset is the amount realized less the adjusted basis.

The sale of machinery for more than the original cost basis (before depreciation), used in a trade or business, and held for more than one year results in the following types of gain or loss?

The §1231 look-back rule recharacterizes §1231 gains if §1231 losses have created ordinary losses in the last 5 years.

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

The sale of computer equipment used in a trade or business for 9 months results in the following type of gain or loss?

Which of the following is how gain or loss realized is calculated?

Which of the following is not a §1245 asset if held for more than one year?

Ordinary gains and losses are obtained on the sale of investments.

Generally, the amount realized is everything of value received in a sale less selling expenses.

An Introduction to Tax

Tax Compliance , the Irs, and Tax Authorities

Tax Planning Strategies and Related Limitations

Individual Income Tax Overview, Exemptions, and Filing Status

Gross Income and Exclusions

Individual for Agi Deductions

Individual From Agi Deductions

Individual Income Tax Computation and Tax Credits

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Entities Overview

Corporate Formations and Operations

Corporate Nonliquidating and Liquidating Distributions

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S: Corporations

Filters