Question 1

The earliest date that condemned property can be replaced and still qualify for involuntary conversion nonrecognition) treatment is

Accepted Answer

A)  The date of the actual condemnation. 
B)  The date of the threat of condemnation. 
C)  Two years before the actual condemnation. 
D)  Two years before the threat of condemnation. 
E)  Three years after the date of the condemnation. 
A)  The date of the actual condemnation. 
B)  The date of the threat of condemnation. 
C)  Two years before the actual condemnation. 
D)  Two years before the threat of condemnation. 
E)  Three years after the date of the condemnation. B

Question 2

If related parties complete a qualified like-kind exchange, how long must the parties wait before disposing of the property exchanged to insure that any realized gain on the transfer is not recognized?

Accepted Answer

A)  No waiting. 
B)  30 days. 
C)  6 months. 
D)  1 year. 
E)  2 years. 
A)  No waiting. 
B)  30 days. 
C)  6 months. 
D)  1 year. 
E)  2 years. E

Question 3

Tony and Faith sell their home for $495,000, incurring selling expenses of $25,000. They purchased the residence for $85,000 and made capital improvements totaling $20,000 during the 20 years they lived there. What is their realized gain and recognized gain on the sale?

Accepted Answer

A

Question 4

Donald and Candice sell their home for $695,000, incurring selling expenses of $30,000. They purchased the residence for $125,000 and made capital improvements totaling $20,000 during the 20 years they lived there. What is their realized gain and recognized gain on the sale?

Accepted Answer

The answer of Donald and Candice sell their home for...

Question 5

Mavis is a schoolteacher with an annual salary of $28,000. Last year she sold a substantial block of securities that she had inherited from her grandmother several years before. She used the proceeds to buy an apartment building in a neighboring community. She realized a $15,000 capital loss on the sale. She carries over $12,000 of the capital loss to the current year. During the current year, a fire destroys the apartment building when its adjusted basis is $100,000. Mavis receives an insurance check for $110,000 and immediately invests it in another apartment building. Advise Mavis how she should deal with these situations for the current tax year.

Accepted Answer

Deferral of realized gains through invol

Question 6

Which of the following qualifies as a like-kind exchange of property? I. Inventory for inventory. II. Office equipment for a delivery van.

Accepted Answer

A)  Only statement I is correct. 
B)  Only statement II is correct. 
C)  Both statements are correct. 
D)  Neither statement is correct. 
A)  Only statement I is correct. 
B)  Only statement II is correct. 
C)  Both statements are correct. 
D)  Neither statement is correct.

Question 7

The deferral of a gain realized on an involuntary conversion is mandatory.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following exchanges of property are like-kind exchanges? I. Convenience store owner trades several cases of potato chips for a cash register. II. A completely rented apartment building traded for a parts supply warehouse to use in business.

Accepted Answer

A)  Only statement I is correct. 
B)  Only statement II is correct. 
C)  Both statements are correct. 
D)  Neither statement is correct. 
A)  Only statement I is correct. 
B)  Only statement II is correct. 
C)  Both statements are correct. 
D)  Neither statement is correct.

Question 9

Matthew exchanges an investment apartment building for a parcel of land. The apartment building has a fair market value of $80,000 and an adjusted basis of $95,000. The land's value is $60,000. Matthew receives $20,000 cash in the exchange. What is Matthew's recognized gain or loss) on the exchange and his basis in the land? Gain Loss) Recognized Basis

Accepted Answer

The answer of Matthew exchanges an investment apartment building for...

Question 10

The holding period of an asset received in a like-kind exchange includes the holding period of the transferred asset.

Accepted Answer

A) True 
 B)False

Question 11

A flood destroys Owen's building that cost $100,000 in 2007, which has an adjusted basis of $80,000. Owen's insurance company reimburses him $125,000 for his loss. Owen promptly reconstructs the building for $115,000. What is the minimum amount of gain that Owen must recognize and his basis in the new building?

Accepted Answer

The answer of A flood destroys Owen's building that cost...

Question 12

Justin trades an office building located in Michigan to John for an apartment complex located in North Carolina. Details of the two properties:     In addition, John pays Justin $3,000,000 cash as part of this transaction. What is the gain loss) recognized by John in this transaction and what is his basis in the Michigan property?

Accepted Answer

The answer of Justin trades an office building located in...

Question 13

No taxable gain or loss is recognized on a like-kind exchange of an investment asset for a similar asset that will be held for investment if both assets consist of

Accepted Answer

A)  Partnership interests. 
B)  Convertible debentures. 
C)  Mortgage notes 
D)  Rental real estate located in different states. 
E)  Common stock of companies in the same industry. 
A)  Partnership interests. 
B)  Convertible debentures. 
C)  Mortgage notes 
D)  Rental real estate located in different states. 
E)  Common stock of companies in the same industry.

Question 14

Belinda exchanges investment real estate with Russell. Belinda's adjusted basis in her two-year old property is $280,000. The property is encumbered by a mortgage of $100,000 and has a fair market value of $320,000 when exchanged. Russell assumes that debt. Russell paid $80,000 cash for his property in 1999 and it is appraised at $150,000 on the day of the exchange. Russell pays Belinda enough in cash to balance the exchange. What is Belinda's basis in the new land?

Accepted Answer

A)  $20,000 
B)  $150,000 
C)  $280,000 
D)  $320,000 
A)  $20,000 
B)  $150,000 
C)  $280,000 
D)  $320,000

Question 15

In general, qualified replacement property for an involuntary conversion must be purchased within one year after the close of the tax year in which the involuntary conversion occurred.

Accepted Answer

A) True 
 B)False

Question 16

Drake and Cynthia sell their home for $475,000, incurring selling expenses of $20,000. They had purchased the residence in 1998 for $105,000 and made capital improvements totaling $25,000. They buy a new residence for   $210,000. What is their realized gain and recognized gain on the sale? What is their basis in the new house?

Accepted Answer

Drake and Cynthia have a realized gain o

Question 17

Dominic and Lois sell their home for $775,000, incurring selling expenses of $40,000. They had purchased the residence in 1990 for $185,000 and made capital improvements totaling $45,000. They buy a new residence for $310,000. What is their realized gain and recognized gain on the sale? What is their basis in the new house?

Accepted Answer

Dominic and Lois have a realized gain of

Question 18

Which of the following qualifies as a like-kind exchange of property? I. Registered trademark for a copyright. II. A 2009 Chevy, business-use automobile for a 2010 Ford, business-use automobile

Accepted Answer

A)  Only statement I is correct. 
B)  Only statement II is correct. 
C)  Both statements are correct. 
D)  Neither statement is correct. 
A)  Only statement I is correct. 
B)  Only statement II is correct. 
C)  Both statements are correct. 
D)  Neither statement is correct.

Question 19

The general mechanism used to defer gains and losses from a transaction includes certain adjustments to the basis of the replacement property. These adjustments include I. subtracting deferred losses. II. adding deferred gains.

Accepted Answer

A)  Only statement I is correct. 
B)  Only statement II is correct. 
C)  Both statements are correct. 
D)  Neither statement is correct. 
A)  Only statement I is correct. 
B)  Only statement II is correct. 
C)  Both statements are correct. 
D)  Neither statement is correct.

Question 20

Under the like-kind exchange rules, when like-kind property is traded for like-kind property, a loss on a trade-in is:

Accepted Answer

A)  recognized and treated as a capital loss. 
B)  recognized and treated as an ordinary loss. 
C)  not recognized and increases the basis of the replacement property. 
D)  not recognized and decreases the basis of the replacement property. 
E)  none of the above. 
A)  recognized and treated as a capital loss. 
B)  recognized and treated as an ordinary loss. 
C)  not recognized and increases the basis of the replacement property. 
D)  not recognized and decreases the basis of the replacement property. 
E)  none of the above.

The earliest date that condemned property can be replaced and still qualify for involuntary conversion nonrecognition) treatment is

If related parties complete a qualified like-kind exchange, how long must the parties wait before disposing of the property exchanged to insure that any realized gain on the transfer is not recognized?

Tony and Faith sell their home for $495,000, incurring selling expenses of $25,000. They purchased the residence for $85,000 and made capital improvements totaling $20,000 during the 20 years they lived there. What is their realized gain and recognized gain on the sale?

Donald and Candice sell their home for $695,000, incurring selling expenses of $30,000. They purchased the residence for $125,000 and made capital improvements totaling $20,000 during the 20 years they lived there. What is their realized gain and recognized gain on the sale?

Which of the following qualifies as a like-kind exchange of property? I. Inventory for inventory. II. Office equipment for a delivery van.

The deferral of a gain realized on an involuntary conversion is mandatory.

Which of the following exchanges of property are like-kind exchanges? I. Convenience store owner trades several cases of potato chips for a cash register. II. A completely rented apartment building traded for a parts supply warehouse to use in business.

The holding period of an asset received in a like-kind exchange includes the holding period of the transferred asset.

No taxable gain or loss is recognized on a like-kind exchange of an investment asset for a similar asset that will be held for investment if both assets consist of

In general, qualified replacement property for an involuntary conversion must be purchased within one year after the close of the tax year in which the involuntary conversion occurred.

Which of the following qualifies as a like-kind exchange of property? I. Registered trademark for a copyright. II. A 2009 Chevy, business-use automobile for a 2010 Ford, business-use automobile

The general mechanism used to defer gains and losses from a transaction includes certain adjustments to the basis of the replacement property. These adjustments include I. subtracting deferred losses. II. adding deferred gains.

Under the like-kind exchange rules, when like-kind property is traded for like-kind property, a loss on a trade-in is:

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

Acquisitions of Property

Cost Recovery on Property: Depreciation, Depletion, and Amortization

Property Dispositions

Choice of Business Entity-General Tax and Nontax Factorsformation

Choice of Business Entity-Operations and Distributions

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Exam 12: Non-Recognition Transactions

The earliest date that condemned property can be replaced and still qualify for involuntary conversion nonrecognition) treatment is

If related parties complete a qualified like-kind exchange, how long must the parties wait before disposing of the property exchanged to insure that any realized gain on the transfer is not recognized?

Tony and Faith sell their home for $495,000, incurring selling expenses of $25,000. They purchased the residence for $85,000 and made capital improvements totaling $20,000 during the 20 years they lived there. What is their realized gain and recognized gain on the sale?

Donald and Candice sell their home for $695,000, incurring selling expenses of $30,000. They purchased the residence for $125,000 and made capital improvements totaling $20,000 during the 20 years they lived there. What is their realized gain and recognized gain on the sale?

Which of the following qualifies as a like-kind exchange of property? I. Inventory for inventory. II. Office equipment for a delivery van.

The deferral of a gain realized on an involuntary conversion is mandatory.

Which of the following exchanges of property are like-kind exchanges? I. Convenience store owner trades several cases of potato chips for a cash register. II. A completely rented apartment building traded for a parts supply warehouse to use in business.

The holding period of an asset received in a like-kind exchange includes the holding period of the transferred asset.

No taxable gain or loss is recognized on a like-kind exchange of an investment asset for a similar asset that will be held for investment if both assets consist of

In general, qualified replacement property for an involuntary conversion must be purchased within one year after the close of the tax year in which the involuntary conversion occurred.

Which of the following qualifies as a like-kind exchange of property? I. Registered trademark for a copyright. II. A 2009 Chevy, business-use automobile for a 2010 Ford, business-use automobile

The general mechanism used to defer gains and losses from a transaction includes certain adjustments to the basis of the replacement property. These adjustments include I. subtracting deferred losses. II. adding deferred gains.

Under the like-kind exchange rules, when like-kind property is traded for like-kind property, a loss on a trade-in is:

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

Acquisitions of Property

Cost Recovery on Property: Depreciation, Depletion, and Amortization

Property Dispositions

Choice of Business Entity-General Tax and Nontax Factorsformation

Choice of Business Entity-Operations and Distributions

Choice of Business Entity-Other Considerations

Tax Research

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