FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 3: Property Dispositions

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 21

Multiple Choice

Review LaterAdd Note

Review Later

Which of the following may qualify as an installment sale?

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) A) and B)
G) C) and D)

Correct Answer

verified

Show Answer

Question 22

Essay

Review LaterAdd Note

Review Later

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?

Correct Answer

verified

$8,571 gain recognized in the current ye...

View Answer

Show Answer

Question 23

Multiple Choice

Review LaterAdd Note

Alpha sold machinery,which it used in its business,to Beta,a related entity,for $40,000.Beta used the machinery in its business.Alpha bought the machinery a few years ago for $50,000 and has claimed $30,000 of depreciation expense.What is the amount and character of Alpha's gain?

Ashburn reported a $105,000 net §1231 gain in year 6.Assuming Ashburn reported $60,000 of nonrecaptured §1231 losses during years 1-5,what amount of Ashburn's net §1231 gain for year 6,if any,is treated as ordinary income?

The §1231 look-back rule recharacterizes §1231 gains if §1231 losses have created ordinary losses in the last 5 years.

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

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

Misha traded computer equipment used in her business to a computer dealer for some new computer equipment.Misha originally purchased the computer equipment for $15,000 and it had an adjusted basis of $11,000 at the time of the exchange.Misha also received a used copier worth $2,000 in the transaction.What is Misha's adjusted basis in the new equipment after the exchange?

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

Only accelerated depreciation is recaptured for §1245 assets.

The sale of computer equipment used in a trade or business for 9 months results in the following type of gain or loss?

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?

Which of the following is NOT true regarding §1239?

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?

Buzz Corporation sold an office building that it used in its business for $500,000.Buzz bought the building ten years ago for $650,000 and has claimed $200,000 of depreciation expense.What is the amount and character of Buzz's gain or loss?

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

The adjusted basis is the cost basis less cost recovery deductions.

Manassas purchased a computer several years ago for $2,200.On November 10^th 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?

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.

Which of the following is NOT an involuntary conversion?