Question 1

Taxpayers who construct property for their own use must capitalize both the direct and indirect construction costs.

Accepted Answer

A) True 
 B)False

Question 2

Match each statement with the correct term below.
-Carryover basis

Accepted Answer

A) Begins on the day after acquisition and ends on the day of disposition. 
B) The initial investment in an asset. 
C) An asset's basis transfers from one owner to another. 
D) The capital investment remaining in an asset at the date of its disposition. 
E) Sales price less expenses of disposition.
F)A purchase of all of the assets of a business.
G)Amount realized is less than adjusted basis.
H)A purchase of all of the assets of a business by buying the stock of a corporation.
I)A term used to identify a situation in which an asset has a different basis for determining gain than for determining loss.
J)The date of death used to value a decedent's estate in the absence of any special election.
K)Six months after the date of death, used to value a decedent's estate when the executor of the estate makes election.
L)Amount realized is greater than adjusted basis. 
A) Begins on the day after acquisition and ends on the day of disposition. 
B) The initial investment in an asset. 
C) An asset's basis transfers from one owner to another. 
D) The capital investment remaining in an asset at the date of its disposition. 
E) Sales price less expenses of disposition.
F)A purchase of all of the assets of a business.
G)Amount realized is less than adjusted basis.
H)A purchase of all of the assets of a business by buying the stock of a corporation.
I)A term used to identify a situation in which an asset has a different basis for determining gain than for determining loss.
J)The date of death used to value a decedent's estate in the absence of any special election.
K)Six months after the date of death, used to value a decedent's estate when the executor of the estate makes election.
L)Amount realized is greater than adjusted basis.

Question 3

Lu is interested in purchasing the assets of Idaho Potato Chip Company.Idaho's assets are:
$$\begin{array} { l c r } 
& \text { Adjusted Basis } & \text { Fair Market Value } \
\text { Cash } & \$ 2,300 & \$ 2,300 \
\text { Inventory }  & \$ 16,500 & \$ 19,200 \
\text { Equipment }& \$ 13,000 & \$ 9,000 \
\text { Land } & \$ 10,000 & \$ 40,500 \
\text { Building } & \$ 76,600 & \$ 129,000 \
\hline &\$ 18,400 & \$ 200,000
\end{array}$$
All of the following statements are correct except:

Accepted Answer

A) If Lu pays $225,000 for the assets, Lu's basis in the tangible assets will be $200,000. 
B) If Lu buys the stock of Idaho for $225,000, the basis in the assets wll be $118,400. 
C) If Lu pays $225,000 for the assets, Lu will have a basis in the building of $129,000. 
D) If Lu buys the stock of Idaho for $225,000, he will recognize goodwill, of $25,000. 
A) If Lu pays $225,000 for the assets, Lu's basis in the tangible assets will be $200,000. 
B) If Lu buys the stock of Idaho for $225,000, the basis in the assets wll be $118,400. 
C) If Lu pays $225,000 for the assets, Lu will have a basis in the building of $129,000. 
D) If Lu buys the stock of Idaho for $225,000, he will recognize goodwill, of $25,000.

Question 4

Morrris,an attorney,performs 5 hours of legal work for Andy.Morrris 's normal billing rate is $120 per hour.Andy,a software consultant,gives Morrris a new computer for his office in payment of the bill.The computer's adjusted basis was $500 and its fair market value is $550 Morrris ' basis in the computer is

Accepted Answer

A) $ - 0 - 
B) $ 500 
C) $ 550 
D) $ 600 
E) $1,150 
A) $ - 0 - 
B) $ 500 
C) $ 550 
D) $ 600 
E) $1,150

Taxpayers who construct property for their own use must capitalize both the direct and indirect construction costs.

Match each statement with the correct term below. -Carryover basis

Federal Income Taxation - an Overview

Income Tax Concepts

Income Sources

Income Exclusions

Introduction to Business Expenses

Business Expenses

Losses: Deductions and Limitations

Taxation of Individuals

Cost Recovery on Property: Depreciation,depletion,and Amortization

Property Dispositions

Nonrecognition Transactions

Choice of Business Entity - General Tax and Nontax Factorsformation

Choice of Business Entity - Operations and Distributions

Choice of Business Entity - Other Considerations

Tax Research

Filters

Exam 9: Acquisitions of Property

Taxpayers who construct property for their own use must capitalize both the direct and indirect construction costs.

Match each statement with the correct term below. -Carryover basis

Federal Income Taxation - an Overview

Income Tax Concepts

Income Sources

Income Exclusions

Introduction to Business Expenses

Business Expenses

Losses: Deductions and Limitations

Taxation of Individuals

Cost Recovery on Property: Depreciation,depletion,and Amortization

Property Dispositions

Nonrecognition Transactions

Choice of Business Entity - General Tax and Nontax Factorsformation

Choice of Business Entity - Operations and Distributions

Choice of Business Entity - Other Considerations

Tax Research

Filters