Exam 11: Property Dispositions

Sumner sold equipment that it uses in its business for $30,000. Sumner bought the equipment a few years ago for $80,000 and has claimed $40,000 of depreciation expense. Assuming that this is Sumner's only disposition during the year, what is the amount and character of Sumner's gain or loss?

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?

Which of the following gains does not result solely in an ordinary gain or loss?

Gainesville LLC sold the following business assets during the current year: (1)machinery, $20,000 cost basis, $4,000 depreciation, $22,000 proceeds; (2)automobile, $15,000 cost basis, $12,000 depreciation, $7,000 proceeds; (3)equipment, $15,000 cost basis, $10,000 depreciation, $4,000 proceeds; (4)computer equipment, $35,000 cost basis, $16,000 depreciation, $15,000 proceeds; (5)Winchester had unrecaptured §1231 losses of $5,000 in the prior five years. What is the amount and character of Winchester's gains and losses before the 1231 netting process?

Sadie sold 10 shares of stock to her brother, George, for $500 16 months ago. Sadie had purchased the stock for $600 two years earlier. If George sells the stock for $700, what are the amount and character of his recognized gain or loss in the current year?

Alexandra sold equipment that she uses in her business for $100,000. Alexandra bought the equipment two years ago for $90,000 and has claimed $25,000 of depreciation expense. What is the amount and character of Alexandra's gain or loss?

Each of the following is true except for:

Jessie sold a piece of land held for investment for $251,800. Jessie bought the land two years ago for $177,900. What is the amount and character of Jessie's gain?

In a deferred like-kind exchange, the like-kind property to be received must be identified within 45 days and acquired within 180 days from the initial exchange.

Ordinary gains and losses are obtained on the sale of investments.

Which of the following is not true regarding installment sales?

Which one of the following is not considered boot in a like-kind exchange?

Which of the following is not true regarding §1239?

Brad sold a rental house that he owned for $247,500. Brad bought the rental house five years ago for $227,500 and has claimed $48,750 of depreciation expense. What is the amount and character of Brad's gain or loss?

Butte sold a machine to a machine dealer for $50,000. Butte bought the machine for $55,000 several years ago and has claimed $12,500 of depreciation expense on the machine. What is the amount and character of Butte's gain or loss?

In the current year, Raven sold machinery with a fair market value of $200,000. The machinery's original basis was $194,750 and Raven's accumulated depreciation on the machinery was $43,800, so its adjusted basis to Raven was $150,950. Raven received $49,050 in the current year and a note paying Raven $75,475 a year for two years beginning next year. What is the amount and character of the gain that Raven will recognize in the current year?

Which of the following sections recaptures or recharacterizes only corporate taxpayers' gains?

Jessie sold a piece of land held for investment for $250,000. Jessie bought the land two years ago for $195,000. What is the amount and character of Jessie's gain?

Frederique sold furniture that she uses in her business for $15,600. Frederique bought the furniture a few years ago for $39,880 and has claimed $20,120 of depreciation expense. What is the amount and character of Frederique's gain or loss?

Winchester LLC sold the following business assets during the current year: (1)automobile, $30,000 cost basis, $12,000 depreciation, $20,000 proceeds; (2)machinery, $25,000 cost basis, $20,000 depreciation, $10,000 proceeds; (3)furniture, $15,000 cost basis, $10,000 depreciation, $4,000 proceeds; (4)computer equipment, $25,000 cost basis, $6,000 depreciation, $10,000 proceeds; (5)Winchester had unrecaptured §1231 losses of $3,000 in the prior five years. What are the amount and character of Winchester's gains and losses before the §1231 netting process? Assume all assets were held for more than one year.