Question 1

A parcel of land is always a capital asset.

Accepted Answer

A) True 
 B)False

Question 2

An asset's tax-adjusted basis is usually greater than its book-adjusted basis.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following may qualify as an installment sale?

Accepted Answer

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. 
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.

Question 4

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.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A)  Capital. 
B)  Ordinary. 
C)  §1231. 
D)  Investment. 
E)  None of the choices are correct. 
A)  Capital. 
B)  Ordinary. 
C)  §1231. 
D)  Investment. 
E)  None of the choices are correct.

Question 6

Explain whether the sale at a loss of a machine used in a trade or business generates an ordinary or capital loss?

Accepted Answer

The sale at a loss of a machine used in

Question 7

Which of the following is not true regarding an asset's adjusted basis?

Accepted Answer

A)  Tax-adjusted basis is usually greater than book-adjusted basis. 
B)  Tax-adjusted basis is usually less than book-adjusted basis. 
C)  Adjusted basis is cost basis less cost recovery deductions. 
D)  Tax-adjusted basis may change over time. 
A)  Tax-adjusted basis is usually greater than book-adjusted basis. 
B)  Tax-adjusted basis is usually less than book-adjusted basis. 
C)  Adjusted basis is cost basis less cost recovery deductions. 
D)  Tax-adjusted basis may change over time.

Question 8

Unrecaptured §1250 gain is taxed at a maximum rate of 25 percent.

Accepted Answer

A) True 
 B)False

Question 9

Brandon, an individual, began business four years ago and has never sold a §1231 asset. Brandon owned each of the assets for several years. In the current year, Brandon sold the following business assets:   Assuming Brandon's marginal ordinary income tax rate is 32 percent, what effect do the gains and losses have on Brandon's tax liability?

Accepted Answer

A)  $7,000 ordinary income, $1,000 §1231 loss, and $1,920 tax liability. 
B)  $6,000 ordinary income and $1,920 tax liability. 
C)  $7,000 §1231 gain and $2,240 tax liability. 
D)  $7,000 §1231 gain and $1,050 tax liability. 
E)  None of the choices are correct. 
A)  $7,000 ordinary income, $1,000 §1231 loss, and $1,920 tax liability. 
B)  $6,000 ordinary income and $1,920 tax liability. 
C)  $7,000 §1231 gain and $2,240 tax liability. 
D)  $7,000 §1231 gain and $1,050 tax liability. 
E)  None of the choices are correct.

Question 10

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

Accepted Answer

A)  $20,000. 
B)  $24,000. 
C)  $36,000. 
D)  $40,000. 
E)  None of the choices are correct. 
A)  $20,000. 
B)  $24,000. 
C)  $36,000. 
D)  $40,000. 
E)  None of the choices are correct.

A parcel of land is always a capital asset.

An asset's tax-adjusted basis is usually greater than its book-adjusted basis.

Which of the following may qualify as an installment sale?

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.

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

Explain whether the sale at a loss of a machine used in a trade or business generates an ordinary or capital loss?

Which of the following is not true regarding an asset's adjusted basis?

Unrecaptured §1250 gain is taxed at a maximum rate of 25 percent.

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Nonliquidating Distributions

Corporate Formation, Reorganization, and Liquidation

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

State and Local Taxes

The Us Taxation of Multinational Transactions

Transfer Taxes and Wealth Planning

Filters

Exam 3: Property Dispositions

A parcel of land is always a capital asset.

An asset's tax-adjusted basis is usually greater than its book-adjusted basis.

Which of the following may qualify as an installment sale?

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.

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

Explain whether the sale at a loss of a machine used in a trade or business generates an ordinary or capital loss?

Which of the following is not true regarding an asset's adjusted basis?

Unrecaptured §1250 gain is taxed at a maximum rate of 25 percent.

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Nonliquidating Distributions

Corporate Formation, Reorganization, and Liquidation

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

State and Local Taxes

The Us Taxation of Multinational Transactions

Transfer Taxes and Wealth Planning

Filters