Question 1

Tyson had a parcel of undeveloped investment land that he wanted to trade for a warehouse to be used in his business. He found a buyer willing to pay him $450,000 for the land. He transferred the land to a third party intermediary on April 1st of the current year. On May 10th, with the help of a commercial real estate agent, Tyson identified two suitable warehouses. On August 10th he made an offer on the first building which was rejected. On August 13th an offer was accepted on the second warehouse. On September 23rd the third party intermediary transferred $500,000 ($450,000 from the original property plus $50,000 from Tyson) to the seller and conveyed title to the warehouse to Tyson. Explain whether the exchange of property qualifies as a like-kind exchange.

Accepted Answer

Yes, the exchange of property qualifies ...

Question 2

Leesburg sold a machine for $2,200 on November 10ᵗʰ of the current year. The machine was purchased for $2,600. Leesburg had taken $1,200 of depreciation deductions on the machine through the date of the sale. What is Leesburg's gain or loss realized on the machine?

Accepted Answer

A)   $800 gain.
B)   $1,000 gain.
C)   $1,200 loss.
D)   $1,400 loss.
E)   None of the choices are correct.F) C) and D)
G) A) and B)

Question 3

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 used in a trade or...

Question 4

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 the choices are correct.F) D) and E)
G) A) and B)

Question 5

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 the choices are correct.F) C) and D)
G) A) and D)

Question 6

An asset's tax adjusted basis is usually greater than its book adjusted basis.

Accepted Answer

A) True 
 B)False

Question 7

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 the choices qualify for installment sale treatment.F) B) and D)
G) B) and C)

Question 8

For an installment sale, the gross profit percentage is the gain recognized divided by the gain realized.

Accepted Answer

A) True 
 B)False

Question 9

The general rule regarding the exchanged basis in the new property received in a like-kind exchange is:

Accepted Answer

A)   The basis is equal to the fair market value of the new property.
B)   The basis is equal to the fair market value of the old property.
C)   The basis is equal to the adjusted basis of the old property.
D)   The basis is equal to the cost basis of the old property.
E)   All of the choices are correct.F) A) and B)
G) A) and E)

Question 10

The §1231 look-back rule applies whether there is a net gain or loss.

Accepted Answer

A) True 
 B)False

Exam 3: Property Dispositions

For an installment sale, the gross profit percentage is the gain recognized divided by the gain realized.

Correct Answer
verified

Leesburg sold a machine for $2,200 on November 10ᵗʰ of the current year. The machine was purchased for $2,600. Leesburg had taken $1,200 of depreciation deductions on the machine through the date of the sale. What is Leesburg's gain or loss realized on the machine?

Correct Answer
verified

Which of the following may qualify as an installment sale?

Correct Answer
verified

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?

Correct Answer
verified

The §1231 look-back rule applies whether there is a net gain or loss.

Correct Answer
verified

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?

Correct Answer
verified
The sale of a machine used in a trade or...
View Answer

Correct Answer
verified
Yes, the exchange of property qualifies ...
View Answer

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

Correct Answer
verified

An asset's tax adjusted basis is usually greater than its book adjusted basis.

Correct Answer
verified

The general rule regarding the exchanged basis in the new property received in a like-kind exchange is:

Correct Answer
verified

Exam 3: Property Dispositions

For an installment sale, the gross profit percentage is the gain recognized divided by the gain realized.

Correct AnswerverifiedShow Answer

Leesburg sold a machine for $2,200 on November 10ᵗʰ of the current year. The machine was purchased for $2,600. Leesburg had taken $1,200 of depreciation deductions on the machine through the date of the sale. What is Leesburg's gain or loss realized on the machine?

Correct AnswerverifiedShow Answer

Which of the following may qualify as an installment sale?

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

The §1231 look-back rule applies whether there is a net gain or loss.

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedThe sale of a machine used in a trade or...View AnswerShow Answer

Correct AnswerverifiedYes, the exchange of property qualifies ...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

An asset's tax adjusted basis is usually greater than its book adjusted basis.

Correct AnswerverifiedShow Answer

The general rule regarding the exchanged basis in the new property received in a like-kind exchange is:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The sale of a machine used in a trade or...
View Answer

Correct Answer
verified
Yes, the exchange of property qualifies ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified