Question 1

fte exlusion may be taken on a sale of a residence once each year, assuming a sale takes place that often.

Accepted Answer

A) True 
 B)False

Question 2

Michael and Mary Mason sold for $380,000 in November of 2012 their residence that they had purchased in 2002 for $75,000. ftey made major capital improvements during their 10-year ownership totaling $25,000.
(a.) What is their excluded gain? How much must they recognize?
(b.) Suppose instead that the Masons sold their home for $720,000. ftey moved into a smaller house costing
$220,000. What is their excluded gain? How much must they recognize?
(c.) Assume instead that the Masons resided in a very depressed neighborhood and the home was sold for only
$60,000. How much gain or loss is recognized?

Accepted Answer

may eclude the total $280,000 realized g

Question 3

Suppose instead that in the preceding problem the Bennetts sold their home for $800,000. ftey moved into a smaller home costing $250,000. How much gain must they recognize?

Accepted Answer

A)  $560,000 
B)  $500,000 
C)  $310,000 
D)  $60,000 
E)  None of the above 
A)  $560,000 
B)  $500,000 
C)  $310,000 
D)  $60,000 
E)  None of the above

Question 4

Ray Randall purchased a residence on February 14, 2010 for $190,000. On September 15, 2012, a tornado completely destroyed his home. fte home was insured for its replacement value and homes in Ray's area had appreciated greatly. He received proceeds of $410,000.
(a.) How much does Ray exclude and recognize?
(b.) If Ray instead had received proceeds of $555,000. How much gain would be excluded and recognized? How much of a replacement residence would have to be purchased in order to exclude or defer all gain realized?

Accepted Answer

(a ) Ray does not recognize any of the $

Question 5

If a gain realized on the sale of a personal residence is above the allowed exclusion, the excess may be deferred through a reduction in the basis of the new residence.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following statements concerning property qualifying for like- kind exchange treatment is incorrect?

Accepted Answer

A)  fte property must be held for productive use in a trade or business or for investment. 
B)  fte transfer of partnership interests qualify for like-kind exchange treatment. 
C)  fte exchange of inventory for a business automobile does not qualify for like-kind exchange treatment. 
D)  fte exchange of unimproved property for improved property qualiﬁes for like-kind exchange treatment. 
A)  fte property must be held for productive use in a trade or business or for investment. 
B)  fte transfer of partnership interests qualify for like-kind exchange treatment. 
C)  fte exchange of inventory for a business automobile does not qualify for like-kind exchange treatment. 
D)  fte exchange of unimproved property for improved property qualiﬁes for like-kind exchange treatment.

Question 7

How much of a replacement residence would Peter have to purchase in order to exclude or defer all gain realized in the preceding problem?

Accepted Answer

A)  $250,000 
B)  $180,000 
C)  $120,000 
D)  $300,000 
E)  None of the above 
A)  $250,000 
B)  $180,000 
C)  $120,000 
D)  $300,000 
E)  None of the above

Question 8

fte time during which the taxpayer's spouse or former spouse owned the residence cannot be added to the taxpayer's period of ownership.

Accepted Answer

A) True 
 B)False

Question 9

Ruth Rumsfeld inherited a home in 2012 that had a basis to her of $100,000. She moved into the inherited home and made it her new principal residence. She sold her former principal residence she had lived in for the past six years for $90,000, realizing a gain of $20,000. She must report the $20,000 gain because she did not reinvest the proceeds in her new principal residence.

Accepted Answer

A) True 
 B)False

Question 10

Davis Drake traded in his old truck, which had an adjusted basis of $13,800, for a new one costing $30,000. fte dealer, Ace Trucks, allowed $18,000 on the old truck and Davis gave $12,000 in cash, as well. What is Davis's basis in the new truck?

Accepted Answer

A)  $13,800 
B)  $18,000 
C)  $25,800 
D)  $30,000 
E)  $31,800 
A)  $13,800 
B)  $18,000 
C)  $25,800 
D)  $30,000 
E)  $31,800

Question 11

Which of the following is not an example of a nontaxable like-kind exchange?

Accepted Answer

A)  Improved real estate for unimproved real estate. 
B)  A printer for a computer. 
C)  Common stock of one company exchanged for common stock of another. 
D)  fte trade of an apartment building for a store building. 
E)  Real estate for a ranch. 
A)  Improved real estate for unimproved real estate. 
B)  A printer for a computer. 
C)  Common stock of one company exchanged for common stock of another. 
D)  fte trade of an apartment building for a store building. 
E)  Real estate for a ranch.

Question 12

If Ben in the preceding problem purchased another home for $400,000, how much gain is recognized?

Accepted Answer

A)  $510,000 
B)  $10,000 
C)  $260,000 
D)  $45,000 
E)  None of the above 
A)  $510,000 
B)  $10,000 
C)  $260,000 
D)  $45,000 
E)  None of the above

fte exlusion may be taken on a sale of a residence once each year, assuming a sale takes place that often.

Suppose instead that in the preceding problem the Bennetts sold their home for $800,000. ftey moved into a smaller home costing $250,000. How much gain must they recognize?

If a gain realized on the sale of a personal residence is above the allowed exclusion, the excess may be deferred through a reduction in the basis of the new residence.

Which of the following statements concerning property qualifying for like- kind exchange treatment is incorrect?

How much of a replacement residence would Peter have to purchase in order to exclude or defer all gain realized in the preceding problem?

fte time during which the taxpayer's spouse or former spouse owned the residence cannot be added to the taxpayer's period of ownership.

Davis Drake traded in his old truck, which had an adjusted basis of $13,800, for a new one costing $30,000. fte dealer, Ace Trucks, allowed $18,000 on the old truck and Davis gave $12,000 in cash, as well. What is Davis's basis in the new truck?

Which of the following is not an example of a nontaxable like-kind exchange?

If Ben in the preceding problem purchased another home for $400,000, how much gain is recognized?

Introduction to Federal Taxation and Understanding the Federal Tax Law

Tax Research, Practice and Procedure

Individual Taxation--An Overview

Gross Income

Gross Income--Exclusions

Deductions: General Concepts and Trade or Business Deductions

Deductions: Businessinvestment Losses and Passive Activity Losses

Deductions: Itemized Deductions

Tax Credits, Prepayments and Special Methods

Property Transactions: Determination of Basis and Gains and Losses

Property Transactions: Treatment of Capital and Section 1231 Assets

Tax Accounting

Deferred Compensation and Education Savings Plans

Federal Estate Tax, Federal Gift Tax and Generation-Skipping Transfer Tax

Income Taxation of Trusts and Estates

Filters

Exam 11: Property Transactions: Nonrecognition of Gains and Losses

fte exlusion may be taken on a sale of a residence once each year, assuming a sale takes place that often.

Suppose instead that in the preceding problem the Bennetts sold their home for $800,000. ftey moved into a smaller home costing $250,000. How much gain must they recognize?

If a gain realized on the sale of a personal residence is above the allowed exclusion, the excess may be deferred through a reduction in the basis of the new residence.

Which of the following statements concerning property qualifying for like- kind exchange treatment is incorrect?

How much of a replacement residence would Peter have to purchase in order to exclude or defer all gain realized in the preceding problem?

fte time during which the taxpayer's spouse or former spouse owned the residence cannot be added to the taxpayer's period of ownership.

Davis Drake traded in his old truck, which had an adjusted basis of $13,800, for a new one costing $30,000. fte dealer, Ace Trucks, allowed $18,000 on the old truck and Davis gave $12,000 in cash, as well. What is Davis's basis in the new truck?

Which of the following is not an example of a nontaxable like-kind exchange?

If Ben in the preceding problem purchased another home for $400,000, how much gain is recognized?

Introduction to Federal Taxation and Understanding the Federal Tax Law

Tax Research, Practice and Procedure

Individual Taxation--An Overview

Gross Income

Gross Income--Exclusions

Deductions: General Concepts and Trade or Business Deductions

Deductions: Businessinvestment Losses and Passive Activity Losses

Deductions: Itemized Deductions

Tax Credits, Prepayments and Special Methods

Property Transactions: Determination of Basis and Gains and Losses

Property Transactions: Treatment of Capital and Section 1231 Assets

Tax Accounting

Deferred Compensation and Education Savings Plans

Federal Estate Tax, Federal Gift Tax and Generation-Skipping Transfer Tax

Income Taxation of Trusts and Estates

Filters