FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 11: Property Dispositions

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 31

True/False

Review LaterAdd Note

Review Later

Losses on sales between related parties are realized but not recognized.

A) True
B) False

Correct Answer

verified

Show Answer

Question 32

Essay

Review LaterAdd Note

Review Later

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.

Correct Answer

verified

Yes, the exchange of property qualifies ...

View Answer

Show Answer

Question 33

Multiple Choice

Review LaterAdd Note

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

Odintz traded land for land. Odintz originally purchased its land for $150,000. The land received was purchased for $200,000 and was subject to a mortgage of $50,000 that was paid off before the transfer. The fair market value of the new land is $240,000. What is Odintz's adjusted basis in the new land after the exchange?

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

The sale of land held for investment results in the following type of gain or loss?

Why does §1250 recapture generally no longer apply?

Sumner sold equipment that it uses in its business for $30,000. Sumner bought the equipment a few years ago for $80,000 and has claimed $40,000 of depreciation expense. Assuming that this is Sumner's only disposition during the year, what is the amount and character of Sumner's gain or loss?

Luke sold land valued at $210,000. His original basis in the land was $180,000. For the land, Luke received $60,000 in cash in the current year and a note providing $150,000 in the subsequent year. What is Luke's recognized gain in the current and subsequent year, respectively?

The amount realized is the sale proceeds less the adjusted basis.

Bull Run sold a computer for $1,200 on November 10^th of the current year. The computer was purchased for $2,800. Bull Run had taken $1,000 of depreciation deductions. What is Bull Run's gain or loss realized on the computer?

Which of the following is not true regarding §1239?

Suzanne, an individual, began business four years ago and has never sold a §1231 asset. Suzanne owned each of the assets for several years. In the current year, Suzanne sold the following business assets: Assuming Suzanne's marginal ordinary income tax rate is 32 percent, what is the character of the gains and losses and what affect do they have on Suzanne's tax liability?

Which of the following is not true regarding installment sales?

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

Unrecaptured §1250 gains apply only to individuals.

Kristi had a business building destroyed in an earthquake. The old building was purchased for $250,000 and $80,000 of depreciation deductions had been taken. Her insurance proceeds were $550,000. Although the replacement property was much larger and nicer than her old building, Kristi's new property qualified as replacement property. She acquired the new property 13 months after the earthquake for $620,000. What is the amount of Kristi's realized gain and recognized gain and the basis in her new property?

After application of the look-back rule, net §1231 gains become capital while net §1231 losses become ordinary.

Each of the following is true except for:

A loss realized for property destroyed in a hurricane is deferred under the involuntary conversion rules.