Exam 11: Property Dispositions

Ashburn reported a $104,875 net §1231 gain in Year 6. Assuming Ashburn reported $52,500 of nonrecaptured §1231 losses during Years 1 to 5, what amount of Ashburn's net §1231 gain for Year 6, if any, is treated as ordinary income?

The gain or loss realized on the sale of an asset is always recognized for tax purposes.

Which one of the following is not true regarding a like-kind exchange?

The §1231 look-back rule applies whether there is a net gain or loss.

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'srecognized gain or loss on the exchange?

Luke sold land valued at $210,100. His original basis in the land was $179,950. For the land, Luke received $60,100 in cash in the current year and a note providing $150,000 in the subsequent year. What is Luke's recognized gain in the current and subsequent year, respectively? (Do not round intermediate values. Round final values to whole number.)

The saleat a loss of machinery that was used in a trade or business and held for more than one year results in which of the following types of loss?

The sale of computer equipment used in a trade or business for nine months results in which of the following types of gain or loss?

§1239 recharacterizes 50 percent of the gain on sales to a related party as ordinary income.

How long after the initial exchange does a taxpayer have to identify replacement property in a like-kind exchange?

Kristi had a business building destroyed in an earthquake. The old building was purchased for $259,500, and $81,900 of depreciation deductions had been taken. Her insurance proceeds were $554,750. Although the replacement property was much larger and nicer than her old building, Kristi's new property qualified as replacement property. She acquired the new property 13 months after the earthquake for $621,900. What is the amount of Kristi's realized gain and recognized gain and the basis in her new property?

Generally, the amount realized is everything of value received in a sale less selling expenses.

Why does §1250 recapture generally no longer apply?

Which of the following may qualify as an installment sale?

Which of the following is true regarding depreciation recapture?

§1250 recaptures the excess of accelerated depreciation over straight-line depreciation on real property placed in servicebefore 1987 as ordinary income.

Which one of the following is not a requirement of a deferred like-kind exchange?

Sadie sold 10 shares of stock to her brother, George, for $590 16 months ago. Sadie had purchased the stock for $780 two years earlier. If George sells the stock for $970, what are the amount and character of his recognized gain or loss in the current year?

Manassas purchased a computer several years ago for $2,600. On November 10^th of the current year, the computer was worth $ 880. If $1,080 of depreciation deductions had been taken, what is Manassas's tax-adjusted basis for the computer?

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