Exam 28: Property Transactions: Nontaxable Exchanges

Ron's building,which was used in his business,was destroyed in a fire.Ron's adjusted basis in the building was $210,000,and its FMV was $330,000.Ron filed an insurance claim and was reimbursed $300,000.In that same year,Ron invested $240,000 of the insurance proceeds in another business building.Ron will recognize gain of

In order to fully defer the gain realized on the involuntary conversion of property,the taxpayer must acquire qualifying replacement property costing at least as much as the cost of the original property.

Each of the following is true of deferral of gain attributable to the involuntary conversion of personal property with the exception of

In order for the gain on the sale of a personal residence to be excluded under Sec.121,a replacement residence must be purchased within two years.

A loss on the sale of a taxpayer's personal residence is deductible if the taxpayer owned and lived in the home for two of five years.

All of the following qualify as a like-kind exchange except

Which of the following statements with respect to a like-kind exchange is false?

A taxpayer exchanges an office building held as an investment asset for an office building to be used in her business.The exchange will qualify as like-kind.

Pierce sold his home this year.He had owned and lived in the house for 10 years.Pierce signed a contract on March 4 to sell his home. Sales price \ 600,000 Selling expenses 15,000 Replaced and paid for a broken window on March 2 800 Basis of old home before repairs and improvements 310,000 Based on these facts,what is the amount of his recognized gain?

If real property used in a trade or business or held for investment is condemned,it must be replaced with property having a similar functional use.

Generally,a full exclusion of gain under Sec.121 upon the sale of a personal residence applies to only one sale or exchange every

Where non-like-kind property other than cash is received as boot,the amount of the boot is the property's fair market value.

Alex owns an office building which the state condemns on January 15,2019.Alex receives the condemnation award on April 1,2019.In order to qualify for nonrecognition of gain on this involuntary conversion,what is the last date for Alex to acquire qualified replacement property?

When an involuntary conversion is due to the condemnation of real property held for productive use in a trade or business or for investment,the replacement period will end three years after the close of the first tax year in which any part of the gain is realized.

The $250,000/$500,000 exclusion for gain on the sale of a personal residence is only available to taxpayers who are age 55 or older.

A taxpayer sells her principal residence of five years and qualifies to exclude her full $100,000 gain.The taxpayer must report this excluded gain on her tax return for the year of sale.

The holding period for boot property received begins on the day after the date of the exchange.

Henri likes to invest in land.In a nontaxable exchange,Henri exchanges land having an adjusted basis of $8,500 and a FMV of $10,000,for a another parcel of land having a FMV of $15,000.In addition,Henri paid cash of $5,000.What is Henri's basis in the new land?

Rolf exchanges an office building worth $150,000 for investment land worth $175,000.He also provided stock worth $25,000.Rolf's adjusted basis in the building and stock is $130,000 and $11,000,respectively.How much gain will Rolf recognize on the exchange?

The taxpayer must be occupying the residence at the time of the sale in order for Sec.121 to apply.