Question 1

§1250 recaptures the excess of accelerated depreciation over straight line depreciation on real property placed in service between 1981 and 1986 as ordinary income.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A)  Sale of a machine at a gain. 
B)  Sale of stock held for investment. 
C)  Sale of a §1231 asset. 
D)  Sale of inventory. 
E)  None of these. 
A)  Sale of a machine at a gain. 
B)  Sale of stock held for investment. 
C)  Sale of a §1231 asset. 
D)  Sale of inventory. 
E)  None of these.

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Alexandra sold equipment that she uses in her business for $100,000. Alexandra bought the equipment two years ago for $90,000 and has claimed $25,000 of depreciation expense. What is the amount and character of Alexandra's gain or loss?

Accepted Answer

$25,000 ordinary gain, and $10,000 §1231

Question 6

Winchester LLC sold the following business assets during the current year: (1) automobile, $30,000 cost basis, $12,000 depreciation, proceeds $20,000; (2) machinery, $25,000 cost basis, $20,000 depreciation, proceeds $10,000; (3) furniture, $15,000 cost basis, $10,000 depreciation, proceeds $4,000; (4) computer equipment, $25,000 cost basis, $6,000 depreciation, proceeds $10,000; (5) Winchester had unrecaptured §1231 losses of $3,000 in the prior 5 years. What is the amount and character of Winchester's gains and losses before the 1231 netting process?

Accepted Answer

A)  $3,000 ordinary loss, $0 §1231 loss. 
B)  $7,000 ordinary gain, $10,000 §1231 loss. 
C)  $7,000 ordinary loss, $4,000 §1231 gain. 
D)  $1,000 ordinary gain, $4,000 §1231 loss. 
E)  None of these. 
A)  $3,000 ordinary loss, $0 §1231 loss. 
B)  $7,000 ordinary gain, $10,000 §1231 loss. 
C)  $7,000 ordinary loss, $4,000 §1231 gain. 
D)  $1,000 ordinary gain, $4,000 §1231 loss. 
E)  None of these.

Question 7

How long after the initial exchange does a taxpayer have to identify replacement property in a like-kind exchange?

Accepted Answer

A)  The like-kind property to be received must be identified within 45 days. 
B)  The like-kind property to be received must be identified by the earlier of 45 days or the last day of the taxpayer's taxable year. 
C)  The like-kind property to be received must be identified within 180 days. 
D)  There is no deadline for the identification of replacement property. 
E)  All of these. 
A)  The like-kind property to be received must be identified within 45 days. 
B)  The like-kind property to be received must be identified by the earlier of 45 days or the last day of the taxpayer's taxable year. 
C)  The like-kind property to be received must be identified within 180 days. 
D)  There is no deadline for the identification of replacement property. 
E)  All of these.

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

§1231 assets include all assets used in a trade or business.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following may qualify as an installment sale?

Accepted Answer

A)  Sale of inventory at a gain. 
B)  Sale of securities. 
C)  Sale of asset used in a business at a gain. 
D)  Land sold at a loss. 
E)  All of these qualify for installment sale treatment. 
A)  Sale of inventory at a gain. 
B)  Sale of securities. 
C)  Sale of asset used in a business at a gain. 
D)  Land sold at a loss. 
E)  All of these qualify for installment sale treatment.

§1250 recaptures the excess of accelerated depreciation over straight line depreciation on real property placed in service between 1981 and 1986 as ordinary income.

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

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

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

Alexandra sold equipment that she uses in her business for $100,000. Alexandra bought the equipment two years ago for $90,000 and has claimed $25,000 of depreciation expense. What is the amount and character of Alexandra's gain or loss?

How long after the initial exchange does a taxpayer have to identify replacement property in a like-kind exchange?

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

§1231 assets include all assets used in a trade or business.

Which of the following may qualify as an installment sale?

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

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Exam 11: Property Dispositions

§1250 recaptures the excess of accelerated depreciation over straight line depreciation on real property placed in service between 1981 and 1986 as ordinary income.

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

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

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

Alexandra sold equipment that she uses in her business for $100,000. Alexandra bought the equipment two years ago for $90,000 and has claimed $25,000 of depreciation expense. What is the amount and character of Alexandra's gain or loss?

How long after the initial exchange does a taxpayer have to identify replacement property in a like-kind exchange?

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

§1231 assets include all assets used in a trade or business.

Which of the following may qualify as an installment sale?

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