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Exam 11: Property Dispositions

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Question 41

Multiple Choice

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Which of the following gains does not result solely in an ordinary gain or loss?

A) Sale of equipment held for less than a year.
B) Sale of inventory.
C) Sale of equipment where the gain realized exceeds the accumulated depreciation.
D) Sale of equipment where the accumulated depreciation exceeds the gain realized.
E) None of the choices are correct.

F) All of the above
G) None of the above

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Question 42

True/False

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Assets held for investment and personal use assets are examples of capital assets.

A) True
B) False

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Question 43

True/False

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

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?

Which of the following is true regarding disallowed losses between related taxpayers?

Which of the following is not used in the calculation of the amount realized:

Gainesville LLC sold the following business assets during the current year: (1)machinery,$20,000 cost basis,$4,000 depreciation,proceeds $22,000; (2)automobile,$15,000 cost basis,$12,000 depreciation,proceeds $7,000; (3)equipment,$15,000 cost basis,$10,000 depreciation,proceeds $4,000; (4)computer equipment,$35,000 cost basis,$16,000 depreciation,proceeds $15,000; (5)Winchester had unrecaptured §1231 losses of $5,000 in the prior 5 years.What is the amount and character of Winchester's gains and losses before the 1231 netting process?

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

Bateman Corporation sold an office building that it used in its business for $800,000.Bateman bought the building ten years ago for $600,000 and has claimed $200,000 of depreciation expense.What is the amount and character of Bateman's gain or loss?

Taxpayers can recognize a taxable gain on the sale of an asset even though an asset's real economic value has declined.

Which of the following may qualify as an installment sale?

Butte sold a machine to a machine dealer for $50,000.Butte bought the machine for $55,000 several years ago and has claimed $12,500 of depreciation expense on the machine.What is the amount and character of Butte's gain or loss?

Manassas purchased a computer several years ago for $2,200.On November 10ᵗʰ of the current year,the computer was worth $800.If $1,000 of depreciation deductions had been taken,what is Manassas' tax adjusted basis for the computer?

All tax gains and losses are ultimately characterized as either ordinary or capital.

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

Sandra sold some equipment for $10,000 in cash,$1,000 of office products,the buyer assumption of her $1,500 loan,and incurred selling expenses of $500.What is the Sandra's amount realized in the transaction?

Which of the following realized gains results in a recognized gain?

What is the character of land used in an active trade or business for two years?

Which of the following is not true regarding §1239?

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.