Question 1

Which one of the following is not considered boot in a like-kind exchange?

Accepted Answer

A)  Cash.
B)  Other property.
C)  Mortgage given.
D)  Mortgage received.
E)  All of the choices can be considered as boot.F) B) and D)
G) A) and D) D

Question 2

Which of the following is true regarding depreciation recapture?

Accepted Answer

A)  Changes the character of a loss.
B)  Changes the character of a gain.
C)  Changes the amount of a gain.
D)  Only applies to ordinary assets.
E)  None of the choices are correct.F) A) and B)
G) A) and C)

Question 3

In a deferred like-kind exchange,the like-kind property to be received must be identified within 45 days and acquired within 180 days from the initial exchange.

Accepted Answer

A) True 
 B)False

Question 4

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 5

Which of the following is not usually included in an asset's tax basis?

Accepted Answer

A)  Purchase price.
B)  Sales tax.
C)  Shipping costs.
D)  Installation costs.
E)  None of the choices are correct.F) A) and D)
G) A) and C)

Question 6

§1250 recaptures the excess of accelerated depreciation over straight-line depreciation on real property placed in service before 1987 as ordinary income.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A)  Machinery.
B)  Automobile.
C)  Business cell phone.
D)  Land.
E)  None of the choices are correct.F) B) and D)
G) D) and E)

Question 8

Which of the following is not true regarding installment sales?

Accepted Answer

A)  Only gains are eligible for installment sale reporting.
B)  Depreciation recapture is deferred in an installment sale.
C)  The gross profit percentage is needed to determine the annual gain recognized.
D)  Stock sales are ineligible for installment sale treatment.
E)  None of the choices are correct.F) A) and B)
G) A) and C)

Question 9

The sale of computer equipment used in a trade or business for nine months results in which of the following types of gain or loss?

Accepted Answer

A)  Capital.
B)  Ordinary.
C)  §1231.
D)  §1245.
E)  None of the choices are correct.F) A) and C)
G) A) and E)

Question 10

Sunshine LLC sold furniture for $75,000.Sunshine bought the furniture for $90,000 several years ago and has claimed $25,000 of depreciation expense on the machine.What is the amount and character of Sunshine's gain or loss?

Accepted Answer

$10,000 ordinary gain.§1245 re...

Question 11

Foreaker LLC sold a piece of land that it uses in its business for $52,000.Foreaker bought the land two years ago for $42,500.What is the amount and character of Foreaker's gain?

Accepted Answer

A)  $9,500 §1221.
B)  $9,500 §1231.
C)  $9,500 §1245.
D)  $9,500 §1250.
E)  None of the choices are correct.F) B) and D)
G) C) and D)

Question 12

An installment sale is any sale where at least a portion of the sale proceeds is received in a subsequent taxable year.

Accepted Answer

A) True 
 B)False  True

Question 13

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.

Accepted Answer

A) True 
 B)False

Question 14

Depreciation recapture changes both the amount and character of a gain.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A)  §291.
B)  §1239.
C)  §1245.
D)  Unrecaptured §1250 gains.
E)  None of the choices are correct.F) C) and D)
G) B) and E)

Question 17

Mary exchanged an office building used in her business for some land.Mary originally purchased the building for $45,000,and it had an adjusted basis of $20,000 at the time of the exchange.The land had a fair market value of $40,000.Mary also gave $4,000 to the seller in the transaction.What is Mary's adjusted basis in the land after the exchange?

Accepted Answer

A)  $20,000.
B)  $24,000.
C)  $36,000.
D)  $40,000.
E)  None of the choices are correct.F) A) and E)
G) B) and C) B

Question 18

Sadie sold 10 shares of stock to her brother,George,for $500 16 months ago.Sadie had purchased the stock for $600 two years earlier.If George sells the stock for $700,what are the amount and character of his recognized gain or loss in the current year?

Accepted Answer

A)  $0.
B)  $100 short-term capital gain.
C)  $100 long-term capital gain.
D)  $200 short-term capital gain.
E)  None of the choices are correct.F) C) and D)
G) A) and D)

Question 19

Which of the following is true regarding the §1231 look-back rule?

Accepted Answer

A)  It only applies when a §1231 loss occurs.
B)  It only applies when a §1231 gain occurs.
C)  It only applies when a §1231 gain occurs and there is a nonrecaptured §1231 loss in the prior five years.
D)  It only applies when a §1231 gain occurs and there is a nonrecaptured §1231 gain in the prior five years.
E)  None of the choices are correct.F) B) and D)
G) C) and E)

Question 20

Which one of the following is not true regarding a like-kind exchange?

Accepted Answer

A)  Loss on like-kind property is not recognized.
B)  Gains on boot given are deferred.
C)  Losses on boot given are not recognized.
D)  Land can be like-kind with a building.
E)  All of the choices are true.F) A) and B)
G) A) and C)

Exam 11: Property Dispositions

Which one of the following is not considered boot in a like-kind exchange?

Correct Answer
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D

Which of the following is true regarding depreciation recapture?

Correct Answer
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In a deferred like-kind exchange,the like-kind property to be received must be identified within 45 days and acquired within 180 days from the initial exchange.

Correct Answer
verified

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

Correct Answer
verified

Which of the following is not usually included in an asset's tax basis?

Correct Answer
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§1250 recaptures the excess of accelerated depreciation over straight-line depreciation on real property placed in service before 1987 as ordinary income.

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

Correct Answer
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Which of the following is not true regarding installment sales?

Correct Answer
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The sale of computer equipment used in a trade or business for nine months results in which of the following types of gain or loss?

Correct Answer
verified

Sunshine LLC sold furniture for $75,000.Sunshine bought the furniture for $90,000 several years ago and has claimed $25,000 of depreciation expense on the machine.What is the amount and character of Sunshine's gain or loss?

Correct Answer
verified
$10,000 ordinary gain.§1245 re...
View Answer

Foreaker LLC sold a piece of land that it uses in its business for $52,000.Foreaker bought the land two years ago for $42,500.What is the amount and character of Foreaker's gain?

Correct Answer
verified

An installment sale is any sale where at least a portion of the sale proceeds is received in a subsequent taxable year.

Correct Answer
verified
True

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.

Correct Answer
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Depreciation recapture changes both the amount and character of a gain.

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

Correct Answer
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Which of the following sections recaptures or recharacterizes only corporate taxpayers' gains?

Correct Answer
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Correct Answer
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B

Sadie sold 10 shares of stock to her brother,George,for $500 16 months ago.Sadie had purchased the stock for $600 two years earlier.If George sells the stock for $700,what are the amount and character of his recognized gain or loss in the current year?

Correct Answer
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Which of the following is true regarding the §1231 look-back rule?

Correct Answer
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Which one of the following is not true regarding a like-kind exchange?

Correct Answer
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Exam 11: Property Dispositions

Which one of the following is not considered boot in a like-kind exchange?

Correct AnswerverifiedD

Which of the following is true regarding depreciation recapture?

Correct AnswerverifiedShow Answer

In a deferred like-kind exchange,the like-kind property to be received must be identified within 45 days and acquired within 180 days from the initial exchange.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following is not usually included in an asset's tax basis?

Correct AnswerverifiedShow Answer

§1250 recaptures the excess of accelerated depreciation over straight-line depreciation on real property placed in service before 1987 as ordinary income.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following is not true regarding installment sales?

Correct AnswerverifiedShow Answer

The sale of computer equipment used in a trade or business for nine months results in which of the following types of gain or loss?

Correct AnswerverifiedShow Answer

Sunshine LLC sold furniture for $75,000.Sunshine bought the furniture for $90,000 several years ago and has claimed $25,000 of depreciation expense on the machine.What is the amount and character of Sunshine's gain or loss?

Correct Answerverified$10,000 ordinary gain.§1245 re...View AnswerShow Answer

Foreaker LLC sold a piece of land that it uses in its business for $52,000.Foreaker bought the land two years ago for $42,500.What is the amount and character of Foreaker's gain?

Correct AnswerverifiedShow Answer

An installment sale is any sale where at least a portion of the sale proceeds is received in a subsequent taxable year.

Correct AnswerverifiedTrue

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.

Correct AnswerverifiedShow Answer

Depreciation recapture changes both the amount and character of a gain.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedB

Sadie sold 10 shares of stock to her brother,George,for $500 16 months ago.Sadie had purchased the stock for $600 two years earlier.If George sells the stock for $700,what are the amount and character of his recognized gain or loss in the current year?

Correct AnswerverifiedShow Answer

Which of the following is true regarding the §1231 look-back rule?

Correct AnswerverifiedShow Answer

Which one of the following is not true regarding a like-kind exchange?

Correct AnswerverifiedShow Answer

Correct Answer
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D

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$10,000 ordinary gain.§1245 re...
View Answer

Correct Answer
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Correct Answer
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True

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Correct Answer
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B

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