Exam 9: Tax-Deferred Exchanges

What is the amount of the casualty loss on a business truck that had a fair market value of $14,000 before an accident and $4,000 after an accident, if its adjusted basis is zero?

How is the basis of stock received for appreciated property in a Section 351 transfer determined?

By what mechanism is a deferral of gain normally accomplished?

What is the control requirement to qualify a gain on transfer to a corporation for tax deferral?

The holding period for boot in a like-kind exchange begins on the date of the exchange.

Which of the following is not a required characteristic of a qualifying Section 351 transaction?

Twining Corporation has some land it wants to trade for a building owned by Clopp Corporation. Clopp does not want to exchange the building because it wants to recognize its loss on the building. Twining, however, does not want to recognize its gain. What alternative(s) does Twining have that will allow it to avoid recognizing gain?

Elizabeth exchanges an office building valued at $400,000 with a $75,000 mortgage and adjusted basis of $180,000 for land valued at $275,000. What is Elizabeth's basis in the land received in the exchange?

If a taxpayer's personal residence is involuntarily converted, the taxpayer can only defer gain by acquiring a new residence in the required time period using IRC §1033.

Corporation P acquires 95 percent of Corporation T's assets for $19.5 million of P's stock in a qualifying reorganization. The assets transferred have a basis of $14 million. T retained $500,000 of cash to pay its remaining liabilities. It only used $200,000 of the cash and the remaining cash and P stock are distributed to T's shareholder, who has a basis of $14 million in her stock. What is the gain recognized on this reorganization?

The taxpayer-use test for deferral of gain on an involuntary conversion requires the taxpayer to acquire property that has the same function or use as the involuntarily converted property that he or she used prior to the conversion.

Kaitlin purchased 100 shares of Norton Corporation stock for $11,500 on January 1, 2015. March 1, 2018, she purchased 30 additional shares of Norton Corporation for $3,000. On March 20, 2018, she sold 25 shares of the 100 shares she had purchased in 2015, for $2,500. What is Kaitlin's recognized gain or loss on the sale of the stock?

All of the following are deferral provisions except:

What effect do liabilities assumed by the partnership have on a partner's basis?

Which of the following is not a characteristic of a like-kind exchange?

Conrad corporation's warehouse was destroyed by a hurricane in September 2018. The estimated fair market value before the hurricane was $750,000 and Conrad's adjusted basis in the warehouse was $450,000. Insurance paid $725,000 as a result of this event. Conrad purchased a new Warehouse in December of 2018 for $700,000. What is Conrad's deductible loss or recognized gain?

What is the limit of the gain that can be recognized on a like-kind exchange?

Dylan, Luke, and Hannah form a partnership. Dylan contributes land with a fair market value of $25,000 (basis of $15,000) in exchange for a 25% interest. Luke contributes equipment with a $35,000 fair market value (basis of $38,000) in exchange for a 35% interest, and Hannah contributes a building with a $100,000 fair market value (basis = $35,000) and a mortgage of $60,000 (assumed by the partnership) in exchange for a 40% interest. How much gain does Hannah recognize?

Which type of reorganization does not allow the parent corporation to make a qualifying transfer to a subsidiary of the property received in the reorganization?

What is a wash sale?