Question 1

Exchange of one partnership interest for another partnership interest qualifies as a like-kind exchange.

Accepted Answer

A) True 
 B)False

Question 2

On an involuntary conversion,gain is recognized to the extent of the lower of gain realized or the proceeds not used for replacement.

Accepted Answer

A) True 
 B)False

Question 3

Dr.and Mrs.Spankle purchased a residence on January 12,2013,for $250,000.On May 15,2017,they sold the residence for $360,000,and paid selling expenses of $18,000.They purchased a new home for $354,000.Determine the Spankles' realized and recognized gain.

Accepted Answer

$92,000 realized gain;$0 recog

Question 4

Julia exchanges a machine used in her business with Elvira for another machine.The basis of Julia's old machine is $100,000,FMV is $132,000,and she gives Elvira cash of $28,000.Elvira's basis in her machine is $140,000 and the FMV is $160,000.What,if any,gain is recognized on the transaction and what is the adjusted basis of the property received by Julia and by Elvira?

Accepted Answer

Julia: 0 gain;$128,000 basis
Elvira: $20

Question 5

To postpone any gain on an involuntary conversion,the taxpayer must purchase qualifying replacement property that is "similar or related in service or use" to the property involuntarily converted.

Accepted Answer

A) True 
 B)False

Question 6

A warehouse with an adjusted basis of $125,000 was destroyed by a tornado on April 15,2018.On June 15,2018,the insurance company paid the owner $195,000.The owner reinvested $170,000 in a warehouse.What is the basis of the new warehouse if non-recognition of gain from an involuntary conversion is elected?

Accepted Answer

$125,000
There is a $70,000 realized gai

Question 7

Louis,who is single,sold his house in St.Louis at a gain of $240,000 on June 8,2017.He properly excluded the gain.He took another job in Memphis.He purchased a new home in Memphis for $225,000 on August 5,2017.Louis was transferred by his employer to New Orleans.Louis sold his Memphis house at a $36,000 gain on October 15,2017.What is Louis's recognized gain on the Memphis house?

Accepted Answer

$11,685 recognized gain.
Since the move

Question 8

On an involuntary conversion in which the taxpayer does not buy replacement property within the replacement period,the gain on the involuntary conversion and any tax due must be reported:

Accepted Answer

A) In the year the replacement period expires. 
B) In the year the involuntary conversion occurred. 
C) Never,because the tax year of the conversion would be closed. 
D) As soon as the taxpayer knows replacement property will not be purchased. 
A) In the year the replacement period expires. 
B) In the year the involuntary conversion occurred. 
C) Never,because the tax year of the conversion would be closed. 
D) As soon as the taxpayer knows replacement property will not be purchased.

Question 9

In what instances,concerning involuntary conversions,must a taxpayer file an amended tax return (Form 1040X)?

Accepted Answer

A) When the taxpayer does not buy replacement property within the replacement period. 
B) When the replacement property purchased by the taxpayer costs less than the amount realized for the converted property. 
C) When the entire amount of the insurance proceeds is used to purchase replacement property. 
D) Both when the taxpayer does not buy replacement property within the replacement period and when the replacement property purchased by the taxpayer costs less than the amount realized for the converted property. 
A) When the taxpayer does not buy replacement property within the replacement period. 
B) When the replacement property purchased by the taxpayer costs less than the amount realized for the converted property. 
C) When the entire amount of the insurance proceeds is used to purchase replacement property. 
D) Both when the taxpayer does not buy replacement property within the replacement period and when the replacement property purchased by the taxpayer costs less than the amount realized for the converted property.

Question 10

On June 15,2017,Roco sold land held for investment to Scotty for $100,000 cash and an installment note of $500,000 payable in five equal annual installments beginning on June 15,2018,plus interest at 10%.Roco's basis in the land is $300,000.What amount of gain is recognized in 2017 under the installment method?

Accepted Answer

$50,000 recognized in 2017.
Gr

Question 11

To qualify for the IRC Section 121 exclusion of gain on the sale of a residence,the taxpayer must have lived in the home for a continuous two-year period.

Accepted Answer

A) True 
 B)False

Question 12

The installment method cannot be used to report the gain on which of the following assets?

Accepted Answer

A) Land used in a trade or business. 
B) Stock traded on a securities market. 
C) Building used in a trade or business. 
D) Stock in a privately-held business. 
A) Land used in a trade or business. 
B) Stock traded on a securities market. 
C) Building used in a trade or business. 
D) Stock in a privately-held business.

Question 13

If married taxpayers live in their personal residence for more than two years,the couple can exclude a maximum of $250,000 on the gain from the sale of the residence.

Accepted Answer

A) True 
 B)False

Question 14

Samantha exchanges a truck used in her business with Phyllis for another truck.The basis of Samantha's old truck is $25,000,FMV is $33,000,and she gives Phyllis cash of $7,000.Phyllis's basis in her truck is $35,000 and its FMV is $40,000.What is Samantha's adjusted basis in the new truck she receives?

Accepted Answer

A) $25,000. 
B) $32,000. 
C) $33,000. 
D) $40,000. 
A) $25,000. 
B) $32,000. 
C) $33,000. 
D) $40,000.

Question 15

On July 1,2017,DJ sold equipment used in her business and reported the gain using the installment method.Her adjusted basis in the equipment was $150,000.The equipment was subject to $30,000 of depreciation recapture.DJ sold the property for $250,000,with $100,000 due on the date of the sale and $150,000 (plus interest at the Federal rate)due on August 1,2018.What is the amount of gain recognized in 2017?

Accepted Answer

$58,000
$58,000 recognized gai

Question 16

Ko exchanges computer equipment (five-year property)with an adjusted basis of $9,000 for a business auto (five-year property)worth $6,000.Ko also receives cash of $5,000.What are the recognized gain or loss and the basis of the new auto?

Accepted Answer

A) $0 and $9,000. 
B) $0 and $6,000. 
C) $2,000 and $11,000. 
D) ($3,000)and $12,000. 
A) $0 and $9,000. 
B) $0 and $6,000. 
C) $2,000 and $11,000. 
D) ($3,000)and $12,000.

Question 17

The holding period of property received in a like-kind exchange:

Accepted Answer

A) Includes the holding period of the old asset exchanged. 
B) Begins on the date of the exchange. 
C) Begins on the date the exchange property is identified. 
D) Begins up to 180 days prior to the exchange. 
A) Includes the holding period of the old asset exchanged. 
B) Begins on the date of the exchange. 
C) Begins on the date the exchange property is identified. 
D) Begins up to 180 days prior to the exchange.

Question 18

The property to be received in a like-kind exchange must be identified within:

Accepted Answer

A) 45 days after the transfer of the property relinquished in the exchange. 
B) 90 days after the transfer of the property relinquished in the exchange. 
C) 180 days after the transfer of the property relinquished in the exchange. 
D) There is no time limit to identify the property to be received. 
A) 45 days after the transfer of the property relinquished in the exchange. 
B) 90 days after the transfer of the property relinquished in the exchange. 
C) 180 days after the transfer of the property relinquished in the exchange. 
D) There is no time limit to identify the property to be received.

Question 19

The adjusted basis of property received in a like-kind exchange can be calculated by taking the FMV of the property received less the gain postponed (plus loss postponed).

Accepted Answer

A) True 
 B)False

Question 20

Jasmine sold land for $250,000 in 2017.The land had a basis of $118,000 and she incurred selling expenses of $10,000.Jasmine received $50,000 cash down in 2017 and will receive five additional annual payments of $40,000 each.What is Jasmine's gross profit percentage on the sale?

Accepted Answer

A) 47.2%. 
B) 48.8%. 
C) 51.2%. 
D) 100.0%. 
A) 47.2%. 
B) 48.8%. 
C) 51.2%. 
D) 100.0%.

Exchange of one partnership interest for another partnership interest qualifies as a like-kind exchange.

On an involuntary conversion,gain is recognized to the extent of the lower of gain realized or the proceeds not used for replacement.

Dr.and Mrs.Spankle purchased a residence on January 12,2013,for $250,000.On May 15,2017,they sold the residence for $360,000,and paid selling expenses of $18,000.They purchased a new home for $354,000.Determine the Spankles' realized and recognized gain.

To postpone any gain on an involuntary conversion,the taxpayer must purchase qualifying replacement property that is "similar or related in service or use" to the property involuntarily converted.

On an involuntary conversion in which the taxpayer does not buy replacement property within the replacement period,the gain on the involuntary conversion and any tax due must be reported:

In what instances,concerning involuntary conversions,must a taxpayer file an amended tax return (Form 1040X)?

To qualify for the IRC Section 121 exclusion of gain on the sale of a residence,the taxpayer must have lived in the home for a continuous two-year period.

The installment method cannot be used to report the gain on which of the following assets?

If married taxpayers live in their personal residence for more than two years,the couple can exclude a maximum of $250,000 on the gain from the sale of the residence.

Ko exchanges computer equipment (five-year property)with an adjusted basis of $9,000 for a business auto (five-year property)worth $6,000.Ko also receives cash of $5,000.What are the recognized gain or loss and the basis of the new auto?

The holding period of property received in a like-kind exchange:

The property to be received in a like-kind exchange must be identified within:

The adjusted basis of property received in a like-kind exchange can be calculated by taking the FMV of the property received less the gain postponed (plus loss postponed).

Jasmine sold land for $250,000 in 2017.The land had a basis of $118,000 and she incurred selling expenses of $10,000.Jasmine received $50,000 cash down in 2017 and will receive five additional annual payments of $40,000 each.What is Jasmine's gross profit percentage on the sale?

Introduction to Taxation, the Income Tax Formula, and Form 1040EZ

Expanded Tax Formula, forms 1040A and 1040, and Basic Concepts

Gross Income: Inclusions and Exclusions

Adjustments for Adjusted Gross Income

Itemized Deductions

Self-Employed Business Income Line 12 of Form 1040 and Schedule C

Capital Gains and Other Sales of Property Schedule D and Form 4797

Rental Property, Royalties, and Income From Flow- Through Entities Line 17, form 1040, and Schedule E

Tax Credits Form 1040,lines 48 Through 54 and Lines 66A Through 73

Payroll Taxes

Retirement and Other Tax-Deferred Plans and Annuities

At-Riskpassive Activity Loss Rules and the Individual Alternative Minimum Tax

Partnership Taxation

Corporate Taxation

Filters

Exam 12: Special Property Transactions

Exchange of one partnership interest for another partnership interest qualifies as a like-kind exchange.

On an involuntary conversion,gain is recognized to the extent of the lower of gain realized or the proceeds not used for replacement.

Dr.and Mrs.Spankle purchased a residence on January 12,2013,for $250,000.On May 15,2017,they sold the residence for $360,000,and paid selling expenses of $18,000.They purchased a new home for $354,000.Determine the Spankles' realized and recognized gain.

To postpone any gain on an involuntary conversion,the taxpayer must purchase qualifying replacement property that is "similar or related in service or use" to the property involuntarily converted.

On an involuntary conversion in which the taxpayer does not buy replacement property within the replacement period,the gain on the involuntary conversion and any tax due must be reported:

In what instances,concerning involuntary conversions,must a taxpayer file an amended tax return (Form 1040X)?

To qualify for the IRC Section 121 exclusion of gain on the sale of a residence,the taxpayer must have lived in the home for a continuous two-year period.

The installment method cannot be used to report the gain on which of the following assets?

If married taxpayers live in their personal residence for more than two years,the couple can exclude a maximum of $250,000 on the gain from the sale of the residence.

Ko exchanges computer equipment (five-year property)with an adjusted basis of $9,000 for a business auto (five-year property)worth $6,000.Ko also receives cash of $5,000.What are the recognized gain or loss and the basis of the new auto?

The holding period of property received in a like-kind exchange:

The property to be received in a like-kind exchange must be identified within:

The adjusted basis of property received in a like-kind exchange can be calculated by taking the FMV of the property received less the gain postponed (plus loss postponed).

Jasmine sold land for $250,000 in 2017.The land had a basis of $118,000 and she incurred selling expenses of $10,000.Jasmine received $50,000 cash down in 2017 and will receive five additional annual payments of $40,000 each.What is Jasmine's gross profit percentage on the sale?

Introduction to Taxation, the Income Tax Formula, and Form 1040EZ

Expanded Tax Formula, forms 1040A and 1040, and Basic Concepts

Gross Income: Inclusions and Exclusions

Adjustments for Adjusted Gross Income

Itemized Deductions

Self-Employed Business Income Line 12 of Form 1040 and Schedule C

Capital Gains and Other Sales of Property Schedule D and Form 4797

Rental Property, Royalties, and Income From Flow- Through Entities Line 17, form 1040, and Schedule E

Tax Credits Form 1040,lines 48 Through 54 and Lines 66A Through 73

Payroll Taxes

Retirement and Other Tax-Deferred Plans and Annuities

At-Riskpassive Activity Loss Rules and the Individual Alternative Minimum Tax

Partnership Taxation

Corporate Taxation

Filters