Question 1

Accounts receivable and inventory are examples of ordinary assets.

Accepted Answer

A) True 
 B)False

Question 2

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 3

Redoubt LLC exchanged an office building used in its business for a rental house.Redoubt originally purchased the building for $80,000,and it had an adjusted basis of $53,000 at the time of the exchange.The rental house had a fair market value of $62,000.Redoubt also received $7,000 of cash in the transaction.What is Redoubt's gain or loss recognized on the exchange? What is Redoubt's basis in the rental house?

Accepted Answer

$7,000 gain.$53,000 basis in the rental

Question 4

Peroni Corporation sold a parcel of land valued at $300,000.Its basis in the land was $250,000.For the land,Peroni received $150,000 in cash in the current year and a note providing Peroni with $150,000 in the subsequent year.What is Peroni's recognized gain in the current and subsequent year,respectively?

Accepted Answer

A) $0,$50,000. 
B) $10,000,$40,000. 
C) $25,000,$25,000. 
D) $50,000,$0. 
E) None of the choices are correct. 
A) $0,$50,000. 
B) $10,000,$40,000. 
C) $25,000,$25,000. 
D) $50,000,$0. 
E) None of the choices are correct.

Question 5

Arlington LLC exchanged land used in its business for some new land.Arlington originally purchased the land it exchanged for $28,000.The new land had a fair market value of $35,000.Arlington also received $2,000 of office equipment in the transaction.What is Arlington's recognized gain or loss on the exchange?

Accepted Answer

A) $0. 
B) $2,000. 
C) $7,000. 
D) $9,000. 
E) None of the choices are correct. 
A) $0. 
B) $2,000. 
C) $7,000. 
D) $9,000. 
E) None of the choices are correct.

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Bull Run sold a computer for $1,200 on November 10th of the current year.The computer was purchased for $2,800.Bull Run had taken $1,000 of depreciation deductions.What is Bull Run's gain or loss realized on the computer?

Accepted Answer

$600 loss realized.The gain or

Question 8

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?

Accepted Answer

A) $0. 
B) $45,000. 
C) $60,000. 
D) $105,000. 
E) None of the choices are correct. 
A) $0. 
B) $45,000. 
C) $60,000. 
D) $105,000. 
E) None of the choices are correct.

Question 9

§1231 assets include all assets used in a trade or business.

Accepted Answer

A) True 
 B)False

Question 10

A deferred like-kind exchange does not help accomplish which of the following objectives?

Accepted Answer

A) To facilitate finding replacement property. 
B) To help acquire the replacement property. 
C) To reduce the possibility that the seller must receive cash (boot)that will taint the transaction. 
D) To certify the taxpayer's Form 8824-Like-kind exchanges. 
E) All of the choices are correct. 
A) To facilitate finding replacement property. 
B) To help acquire the replacement property. 
C) To reduce the possibility that the seller must receive cash (boot)that will taint the transaction. 
D) To certify the taxpayer's Form 8824-Like-kind exchanges. 
E) All of the choices are correct.

Accounts receivable and inventory are examples of ordinary assets.

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

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

Bull Run sold a computer for $1,200 on November 10^th of the current year.The computer was purchased for $2,800.Bull Run had taken $1,000 of depreciation deductions.What is Bull Run's gain or loss realized on the computer?

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?

§1231 assets include all assets used in a trade or business.

A deferred like-kind exchange does not help accomplish which of the following objectives?

An Introduction to Tax

Tax Compliance,the Irs,and Tax Authorities

Tax Planning Strategies and Related Limitations

Individual Income Tax Overview,dependents,and Filing Status

Gross Income and Exclusions

Individual Deductions

Investments

Individual Income Tax Computation and Tax Credits

Business Income,deductions,and Accounting Methods

Property Acquisition and Cost Recovery

Compensation

Retirement Savings and Deferred Compensation

Tax Consequences of Home Ownership

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 Ustaxation of Multinational Transactions

Transfer Taxes and Wealth Planning

Filters

Exam 11: Property Dispositions

Accounts receivable and inventory are examples of ordinary assets.

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

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

Bull Run sold a computer for $1,200 on November 10th of the current year.The computer was purchased for $2,800.Bull Run had taken $1,000 of depreciation deductions.What is Bull Run's gain or loss realized on the computer?

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?

§1231 assets include all assets used in a trade or business.

A deferred like-kind exchange does not help accomplish which of the following objectives?

An Introduction to Tax

Tax Compliance,the Irs,and Tax Authorities

Tax Planning Strategies and Related Limitations

Individual Income Tax Overview,dependents,and Filing Status

Gross Income and Exclusions

Individual Deductions

Investments

Individual Income Tax Computation and Tax Credits

Business Income,deductions,and Accounting Methods

Property Acquisition and Cost Recovery

Compensation

Retirement Savings and Deferred Compensation

Tax Consequences of Home Ownership

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 Ustaxation of Multinational Transactions

Transfer Taxes and Wealth Planning

Filters

Bull Run sold a computer for $1,200 on November 10^th of the current year.The computer was purchased for $2,800.Bull Run had taken $1,000 of depreciation deductions.What is Bull Run's gain or loss realized on the computer?