This year Jenna had the gains and losses noted below on property,plant and equipment used in her business.Each asset had been held longer than one year.Jenna has not previously disposed of any business assets. \[\begin{array} { |l | r| } \hline\text { Loss due to insurance reimbursement for fire } & \$ ( 17,000 ) \\ \hline \text { Loss due to condemnation } & ( 12,000 ) \\ \hline \text { Gain on sale of Sec. } 1231 \text { property } & 21,000 \\ \hline \end{array}\] Jenna will recognize

A) \[\begin{array} { | r | r | } \hline \text { Ordinary gain (loss) } & \text { LTCG(L) } \\ \hline \$ ( 17,000 ) & \$ 9,000 \\ \hline \end{array}\] B) \[\begin{array} { | r | r | } \hline \text { Ordinary gain (loss) } & \text { LTCG(L) } \\ \hline \$ ( 29,000 ) & \$ 21,000 \\ \hline \end{array}\] C) \[\begin{array} { | r | r | } \hline \text { Ordinary gain (loss) } & \text { LTCG(L) } \\ \hline \$ ( 8,000 ) & \$ 0 \\ \hline \end{array}\] D) \[\begin{array} {| r | r | } \hline \text { Ordinary gain (loss) } & \text { LTCG(L) } \\ \hline \$ ( 12,000 ) & \$ 4,000 \\ \hline \end{array}\] A) \[\begin{array} { | r | r | } \hline \text { Ordinary gain (loss) } & \text { LTCG(L) } \\ \hline \$ ( 17,000 ) & \$ 9,000 \\ \hline \end{array}\] B) \[\begin{array} { | r | r | } \hline \text { Ordinary gain (loss) } & \text { LTCG(L) } \\ \hline \$ ( 29,000 ) & \$ 21,000 \\ \hline \end{array}\] C) \[\begin{array} { | r | r | } \hline \text { Ordinary gain (loss) } & \text { LTCG(L) } \\ \hline \$ ( 8,000 ) & \$ 0 \\ \hline \end{array}\] D) \[\begin{array} {| r | r | } \hline \text { Ordinary gain (loss) } & \text { LTCG(L) } \\ \hline \$ ( 12,000 ) & \$ 4,000 \\ \hline \end{array}\]

A corporation sold a warehouse during the current year.The company purchased the building 25 years ago.Details are as follows \[\begin{array} { | l | r | } \hline \text { Cost } & \$ 800,000 \\ \hline \text { Accumulated Depreciation } & 620,000 \\ \hline \text { Selling Price } & 890,000 \\ \hline \end{array}\] How much gain should the corporation report as Sec.1231 gain?

A) $124,000 B) $90,000 C) $586,000 D) $710,000 A) $124,000 B) $90,000 C) $586,000 D) $710,000

This year Pranav had the gains and losses noted below on property,plant and equipment used in his business.Each asset had been held longer than one year. \[\begin{array} {| l | r| } \hline\text { Gain due to insurance reimbursement for fire } & \$ 17,000 \\ \hline \text { Loss due to condemnation } & ( 12,000 ) \\ \hline \text { Gain on sale of Sec. 1231 property } & 21,000 \\ \hline \end{array}\] A review of Pranav's reporting of Sec.1231 transactions for the prior five years indicates a net Sec.1231 loss of $14,000 three years ago and a net Sec.1231 gain of $8,000 last year (before the five-year lookback).Pranav will recognize

A) \[\begin{array} {| r | r | } \hline \text { Ordinary gain (loss) } & \text { LTCG(L) } \\ \hline \$ ( 6,000 ) & \$ 26,000\\\hline \end{array}\] B) \[\begin{array} {| r | r | } \hline \text { Ordinary gain (loss) } & \text { LTCG(L) } \\ \hline \$ ( 18,000 ) & \$ 38,000 \\ \hline \end{array}\] C) \[\begin{array} { |r | r |} \hline \text { Ordinary gain (loss) } & \text { LTCG(L) } \\ \hline\$ 0 & \$ 18,000\\\hline \end{array}\] D) \[\begin{array} {| r | r| } \hline \text { Ordinary gain (loss) } & \text { LTCG(L) } \\ \hline \$ 6,00 \mathrm {~d} & \$ 20,00 \mathrm { l }\\\hline \end{array}\] A) \[\begin{array} {| r | r | } \hline \text { Ordinary gain (loss) } & \text { LTCG(L) } \\ \hline \$ ( 6,000 ) & \$ 26,000\\\hline \end{array}\] B) \[\begin{array} {| r | r | } \hline \text { Ordinary gain (loss) } & \text { LTCG(L) } \\ \hline \$ ( 18,000 ) & \$ 38,000 \\ \hline \end{array}\] C) \[\begin{array} { |r | r |} \hline \text { Ordinary gain (loss) } & \text { LTCG(L) } \\ \hline\$ 0 & \$ 18,000\\\hline \end{array}\] D) \[\begin{array} {| r | r| } \hline \text { Ordinary gain (loss) } & \text { LTCG(L) } \\ \hline \$ 6,00 \mathrm {~d} & \$ 20,00 \mathrm { l }\\\hline \end{array}\]

Exam 29: Property Transactions: Sec1231 and Recapture

Douglas bought office furniture two years and four months ago for $25,000 to use in his business and elected to expense all of it under Sec.179.Depreciation of $3,500 would have been taken under the MACRS rules.If Douglas converts the furniture to nonbusiness use today,Douglas must

(Multiple Choice)

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Question 61

Emily,whose tax rate is 32%,owns an office building which she purchased for $900,000 on March 18 of last year.The building is sold for $950,000 on February 20 of this year when the adjusted basis of the building was $876,000.The tax results to Emily are

(Multiple Choice)

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Question 62

Which of the following assets is 1231 property?

(Multiple Choice)

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Question 63

This year Jenna had the gains and losses noted below on property,plant and equipment used in her business.Each asset had been held longer than one year.Jenna has not previously disposed of any business assets. Loss due to insurance reimbursement for fire \ (17,000) Loss due to condemnation (12,000) Gain on sale of Sec. 1231 property 21,000 Jenna will recognize

(Multiple Choice)

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Question 64

A corporation sold a warehouse during the current year.The company purchased the building 25 years ago.Details are as follows Cost \ 800,000 Accumulated Depreciation 620,000 Selling Price 890,000 How much gain should the corporation report as Sec.1231 gain?

(Multiple Choice)

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Question 65

Section 1250 does not apply to assets sold or exchanged at a loss.

(True/False)

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Question 66

Emma owns a small building ($120,000 basis and $123,000 FMV)and equipment ($35,000 adjusted basis and $22,000 FMV).Both assets were acquired three years ago and are used in Emma's business.Both are destroyed by fire.Insurance proceeds were equal to their FMVs.Only one other transfer of an asset occurs during the year,and a $3,000 LTCL is recognized.After considering all transactions,the tax result to Emma is a

(Multiple Choice)

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Question 67

If the accumulated depreciation on business equipment held longer than one year exceeds realized gain on the sale of the equipment,all of the realized gain will be treated as Sec.1231 gain.

(True/False)

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Question 68

Jaiyoun sells Sec.1231 property this year,resulting in a $4,000 gain.This is the first time he has disposed of any Sec.1231 property.Jaiyoun's tax rate is 10%.His tax on the Sec.1231 gain will be

(Multiple Choice)

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Question 69

For noncorporate taxpayers,depreciation recapture is not required on real property placed in service after 1986.

(True/False)

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Question 70

Clarise bought a building three years ago for $180,000 to use in her business.The straight-line method of depreciation was used and $15,000 of depreciation deductions were allowed.During the current year,Clarise sells the building to her wholly owned corporation for $235,000.The tax results to Clarise are

(Multiple Choice)

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Question 71

Sec.1245 can increase the amount of gain recognized on an asset.

(True/False)

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Question 72

In 1988,Artima Corporation (a C corporation)purchased an office building for $400,000 for use in its business.The building is sold during the current year for $550,000.Total MACRS depreciation allowed for the building was $390,000.This is the only business asset sold by the corporation over the past six years.As result of the sale,how much ordinary gain will Artima Corporation report?

(Multiple Choice)

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Question 73

A sole proprietor plans to sell an office building which was acquired and placed in service in 1995.Sec.1250 requires a portion of gain realized on the sale of a building used in a business and depreciated under MACRS to be recaptured as ordinary gain.

(True/False)

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Question 74

For livestock to be considered Sec.1231 property

(Multiple Choice)

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Question 75

During the current year,Danika recognizes a $30,000 Sec.1231 gain and a $22,000 Sec.1231 loss.Prior to this,Danika's only Sec.1231 item was a $15,000 loss two years ago.Danika must report a(n)

(Multiple Choice)

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Question 76

The purpose of Sec.1245 is to eliminate the advantage taxpayers would have if they were able to reduce ordinary income by depreciation deductions and also receive favorable Sec.1231 treatment when the asset was sold.

(True/False)

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Question 77

This year Pranav had the gains and losses noted below on property,plant and equipment used in his business.Each asset had been held longer than one year. Gain due to insurance reimbursement for fire \ 17,000 Loss due to condemnation (12,000) Gain on sale of Sec. 1231 property 21,000 A review of Pranav's reporting of Sec.1231 transactions for the prior five years indicates a net Sec.1231 loss of $14,000 three years ago and a net Sec.1231 gain of $8,000 last year (before the five-year lookback).Pranav will recognize

(Multiple Choice)

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Question 78

The amount recaptured as ordinary income under either Sec.1245 or Sec.1250 can never exceed the realized gain.

(True/False)

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Question 79

If Sec.1231 applies to the sale or exchange of an unharvested crop sold with land,the costs of producing the crop are

(Multiple Choice)

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Question 80

Showing 61 - 80 of 95

Exam 29: Property Transactions: Sec1231 and Recapture

Douglas bought office furniture two years and four months ago for $25,000 to use in his business and elected to expense all of it under Sec.179.Depreciation of $3,500 would have been taken under the MACRS rules.If Douglas converts the furniture to nonbusiness use today,Douglas must

Emily,whose tax rate is 32%,owns an office building which she purchased for $900,000 on March 18 of last year.The building is sold for $950,000 on February 20 of this year when the adjusted basis of the building was $876,000.The tax results to Emily are

Which of the following assets is 1231 property?

A corporation sold a warehouse during the current year.The company purchased the building 25 years ago.Details are as follows Cost \ 800,000 Accumulated Depreciation 620,000 Selling Price 890,000 How much gain should the corporation report as Sec.1231 gain?

Section 1250 does not apply to assets sold or exchanged at a loss.

If the accumulated depreciation on business equipment held longer than one year exceeds realized gain on the sale of the equipment,all of the realized gain will be treated as Sec.1231 gain.

Jaiyoun sells Sec.1231 property this year,resulting in a $4,000 gain.This is the first time he has disposed of any Sec.1231 property.Jaiyoun's tax rate is 10%.His tax on the Sec.1231 gain will be

For noncorporate taxpayers,depreciation recapture is not required on real property placed in service after 1986.

Sec.1245 can increase the amount of gain recognized on an asset.

A sole proprietor plans to sell an office building which was acquired and placed in service in 1995.Sec.1250 requires a portion of gain realized on the sale of a building used in a business and depreciated under MACRS to be recaptured as ordinary gain.

For livestock to be considered Sec.1231 property

During the current year,Danika recognizes a $30,000 Sec.1231 gain and a $22,000 Sec.1231 loss.Prior to this,Danika's only Sec.1231 item was a $15,000 loss two years ago.Danika must report a(n)

The purpose of Sec.1245 is to eliminate the advantage taxpayers would have if they were able to reduce ordinary income by depreciation deductions and also receive favorable Sec.1231 treatment when the asset was sold.

The amount recaptured as ordinary income under either Sec.1245 or Sec.1250 can never exceed the realized gain.

If Sec.1231 applies to the sale or exchange of an unharvested crop sold with land,the costs of producing the crop are

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