Question 1

The holding period for property acquired by inheritance begins on the date of the decedent's death.

Accepted Answer

A) True 
 B)False

Question 2

In 2017,Camilo had a net capital loss of $5,650 and taxable income of $110,000.What is Camilo's loss carryforward to 2018?

Accepted Answer

A) $2,650. 
B) $5,650. 
C) $0. 
D) $3,000. 
A) $2,650. 
B) $5,650. 
C) $0. 
D) $3,000.

Question 3

In 2017,Miranda's has a net short-term capital loss of $2,800,a net long-term capital loss of $7,100,and wage income of $89,350.
a.What is Miranda's capital loss deduction for 2017?
b.What amount of the capital loss qualifies as a carryover?
c.What is Miranda's total income for 2017 before additions/deductions for adjusted gross income?

Accepted Answer

a.$3,000
b

Question 4

The basis of property transferred to a taxpayer from a spouse or former spouse incident to a divorce is the FMV of the property at the date the divorce was final.

Accepted Answer

A) True 
 B)False

Question 5

All of the following statements regarding the definition of Section 1231 are incorrect except:

Accepted Answer

A) Property used in a trade or business regardless of how long the asset is held. 
B) Property used in a trade or business that may or may not be subject to depreciation and held for more than one year. 
C) Property used in a trade or business that is subject to depreciation and held for more than one year. 
D) Property used in a trade or business that may or may not be subject to depreciation and held for less than one year. 
A) Property used in a trade or business regardless of how long the asset is held. 
B) Property used in a trade or business that may or may not be subject to depreciation and held for more than one year. 
C) Property used in a trade or business that is subject to depreciation and held for more than one year. 
D) Property used in a trade or business that may or may not be subject to depreciation and held for less than one year.

Question 6

Joe received a parcel of land as a gift from his sister,Lisa,in 2012.At the time of the gift,the land had a FMV of $20,000.Lisa purchased the land in 2008 for $23,000.If Joe sells the land in 2017 for $32,450,he will report a

Accepted Answer

A) $9,450 ordinary gain. 
B) $9,450 capital gain. 
C) $12,450 capital gain. 
D) $19,540 capital gain. 
A) $9,450 ordinary gain. 
B) $9,450 capital gain. 
C) $12,450 capital gain. 
D) $19,540 capital gain.

Question 7

On which form or schedule is the selling of inventory related to the course of business recorded for a sole proprietor?

Accepted Answer

A) Form 4797. 
B) Schedule C. 
C) Schedule SE. 
D) Schedule D. 
A) Form 4797. 
B) Schedule C. 
C) Schedule SE. 
D) Schedule D.

Question 8

Greg received a gift of 300 shares of stock from his sister,Terri.The stock cost Terri $30,000 five years ago.At the date of the gift,the stock is worth $22,500.
a.If the stock is sold for $34,000,calculate the amount and nature of the gain or loss.
b.If the stock is sold for $20,000,calculate the amount and nature of the gain or loss.
c.If the stock is sold for $28,000,calculate the amount and nature of the gain or loss.

Accepted Answer

a.$4,000 long-term g

Question 9

Sara owns an automobile for personal use.The adjusted basis is $13,500 and the FMV is $10,500.Sara has owned the car for two years.
a.Calculate the realized gain (loss)if Sara sells the vehicle for $12,500.
b.Calculate the recognized gain (loss)if Sara sells the vehicle for $12,500.
c.Calculate the realized gain (loss)if Sara sells the vehicle for $15,000.
d.Calculate the recognized gain (loss)if Sara sells the vehicle for $15,000.

Accepted Answer

a.($1,000)

Question 10

Samson purchased some equipment for $86,749 on March 15,2016.He decided he did not need the equipment and sold it on March 10,2017 for $82,000.The equipment was subject to depreciation of $16,851 for 2016 and 2017.What gain or loss will Samson recognize on the sale of the equipment?

Accepted Answer

A) $4,749 capital loss. 
B) $4,749 ordinary loss. 
C) $12,102 capital gain. 
D) $12,102 ordinary gain. 
A) $4,749 capital loss. 
B) $4,749 ordinary loss. 
C) $12,102 capital gain. 
D) $12,102 ordinary gain.

Question 11

Jeffery,the owner of a remodeling company and a sole proprietor,sold a commercial building he used in his business.He acquired the building on February 15,2014 for $420,000 and sold it December 30,2017,for $480,000.Jeffery had taken $41,294 in depreciation.Assume Jeffery is in the 39.6% tax bracket and no other assets were sold in 2017.
What is the adjusted basis of the building?
What is the amount gain on the sale of the building?
How much of the gain is considered unrecaptured 1250 gain?
How much of the gain is considered a capital gain?
Calculate the tax on the unrecaptured 1250 gain.
Calculate the tax on the gain considered to be capital in nature.

Accepted Answer

a.$378,706.
b.$101,2

Question 12

In 2014,Niveen purchased land for $88,000 for use in her landscape business.She sold it in 2017 for $97,500.If Niveen has no other sales of business or trade property,how will this gain be taxed?

Accepted Answer

A) $9,500 short-term capital gain. 
B) $9,500 long-term capital gain. 
C) $9,500 ordinary income. 
D) $9,500 Section 1231 gain. 
A) $9,500 short-term capital gain. 
B) $9,500 long-term capital gain. 
C) $9,500 ordinary income. 
D) $9,500 Section 1231 gain.

Question 13

The purpose of Code Sections 1245 and 1250 recapture provisions is to restrict the possibility of converting ordinary income into capital gains through use of depreciation deductions.

Accepted Answer

A) True 
 B)False

Question 14

If a taxpayer has a net Section 1231 loss for the year,all Section 1231 gains and losses are treated as being capital gains and losses.

Accepted Answer

A) True 
 B)False

Question 15

Any Section 1245 gain is recognized as "ordinary" to the extent of the depreciation taken.

Accepted Answer

A) True 
 B)False

Question 16

The holding period of an asset starts on the date acquired and ends on the day the asset is sold.

Accepted Answer

A) True 
 B)False

Question 17

What is the basis of artistic works that have been gifted to another by the creator?

Accepted Answer

A) Artistic works are not capital assets for the creator or the recipient of the artistic works if given as a gift. 
B) Artistic works are not capital assets for the creator but are capital assets in the hands of the recipient if the creator gave the artistic works as a gift. 
C) Artistic works are capital assets to the creator if they are sold to an unrelated person. 
D) Artistic works are capital assets if they were available for sale in an art gallery. 
A) Artistic works are not capital assets for the creator or the recipient of the artistic works if given as a gift. 
B) Artistic works are not capital assets for the creator but are capital assets in the hands of the recipient if the creator gave the artistic works as a gift. 
C) Artistic works are capital assets to the creator if they are sold to an unrelated person. 
D) Artistic works are capital assets if they were available for sale in an art gallery.

Question 18

Anike received property as part of an inheritance from her father who passed away on March 10,2017.Her father purchased the property on July 3,2016,for $156,000.Anike sold the property on June 30,2017,for $168,000.At the date of his death the property had a FMV of $154,000.What gain,if any,will Anike pick up on her return for 2017?

Accepted Answer

A) no gain is recognized on the sale of property sold within 1 year of inheritance. 
B) $3,000 long-term gain. 
C) $14,000 short-term gain. 
D) $14,000 long-term gain. 
A) no gain is recognized on the sale of property sold within 1 year of inheritance. 
B) $3,000 long-term gain. 
C) $14,000 short-term gain. 
D) $14,000 long-term gain.

Question 19

If the property's fair market value at the date of the gift is lower than the adjusted basis,then the property's basis for determining loss is its fair market value on that date.

Accepted Answer

A) True 
 B)False

Question 20

Inventory on hand at the end of the year is Section 1231 property.

Accepted Answer

A) True 
 B)False

The holding period for property acquired by inheritance begins on the date of the decedent's death.

In 2017,Camilo had a net capital loss of $5,650 and taxable income of $110,000.What is Camilo's loss carryforward to 2018?

The basis of property transferred to a taxpayer from a spouse or former spouse incident to a divorce is the FMV of the property at the date the divorce was final.

All of the following statements regarding the definition of Section 1231 are incorrect except:

Joe received a parcel of land as a gift from his sister,Lisa,in 2012.At the time of the gift,the land had a FMV of $20,000.Lisa purchased the land in 2008 for $23,000.If Joe sells the land in 2017 for $32,450,he will report a

On which form or schedule is the selling of inventory related to the course of business recorded for a sole proprietor?

Samson purchased some equipment for $86,749 on March 15,2016.He decided he did not need the equipment and sold it on March 10,2017 for $82,000.The equipment was subject to depreciation of $16,851 for 2016 and 2017.What gain or loss will Samson recognize on the sale of the equipment?

In 2014,Niveen purchased land for $88,000 for use in her landscape business.She sold it in 2017 for $97,500.If Niveen has no other sales of business or trade property,how will this gain be taxed?

The purpose of Code Sections 1245 and 1250 recapture provisions is to restrict the possibility of converting ordinary income into capital gains through use of depreciation deductions.

If a taxpayer has a net Section 1231 loss for the year,all Section 1231 gains and losses are treated as being capital gains and losses.

Any Section 1245 gain is recognized as "ordinary" to the extent of the depreciation taken.

The holding period of an asset starts on the date acquired and ends on the day the asset is sold.

What is the basis of artistic works that have been gifted to another by the creator?

If the property's fair market value at the date of the gift is lower than the adjusted basis,then the property's basis for determining loss is its fair market value on that date.

Inventory on hand at the end of the year is Section 1231 property.

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

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

Special Property Transactions

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

Partnership Taxation

Corporate Taxation

Filters

Exam 7: Capital Gains and Other Sales of Property Schedule D and Form 4797

The holding period for property acquired by inheritance begins on the date of the decedent's death.

In 2017,Camilo had a net capital loss of $5,650 and taxable income of $110,000.What is Camilo's loss carryforward to 2018?

The basis of property transferred to a taxpayer from a spouse or former spouse incident to a divorce is the FMV of the property at the date the divorce was final.

All of the following statements regarding the definition of Section 1231 are incorrect except:

Joe received a parcel of land as a gift from his sister,Lisa,in 2012.At the time of the gift,the land had a FMV of $20,000.Lisa purchased the land in 2008 for $23,000.If Joe sells the land in 2017 for $32,450,he will report a

On which form or schedule is the selling of inventory related to the course of business recorded for a sole proprietor?

Samson purchased some equipment for $86,749 on March 15,2016.He decided he did not need the equipment and sold it on March 10,2017 for $82,000.The equipment was subject to depreciation of $16,851 for 2016 and 2017.What gain or loss will Samson recognize on the sale of the equipment?

In 2014,Niveen purchased land for $88,000 for use in her landscape business.She sold it in 2017 for $97,500.If Niveen has no other sales of business or trade property,how will this gain be taxed?

The purpose of Code Sections 1245 and 1250 recapture provisions is to restrict the possibility of converting ordinary income into capital gains through use of depreciation deductions.

If a taxpayer has a net Section 1231 loss for the year,all Section 1231 gains and losses are treated as being capital gains and losses.

Any Section 1245 gain is recognized as "ordinary" to the extent of the depreciation taken.

The holding period of an asset starts on the date acquired and ends on the day the asset is sold.

What is the basis of artistic works that have been gifted to another by the creator?

If the property's fair market value at the date of the gift is lower than the adjusted basis,then the property's basis for determining loss is its fair market value on that date.

Inventory on hand at the end of the year is Section 1231 property.

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

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

Special Property Transactions

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

Partnership Taxation

Corporate Taxation

Filters