Exam 28: Property Transactions: Nontaxable Exchanges

Mitchell and Debbie Dixon,a married couple,sell their personal residence to Sophie.Sophie pays $225,000 and assumes their $70,000 mortgage.To make the sale the Dixons pay $4,000 in commissions and $1,000 in legal costs.The couple has owned and lived in the house for seven years and their tax basis is $125,000.What is the amount of gain recognized on the sale?

(Multiple Choice)

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Question 121

In a nontaxable exchange,Henri traded in a truck having an adjusted basis of $8,500 and a FMV of $10,000,for a new truck having a FMV of $15,000.In addition,Henri paid cash of $5,000.What is Henri's basis in the new truck?

(Multiple Choice)

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(40)

Question 122

If a principal residence is sold before satisfying the ownership and use tests,part of the gain may be excluded if the sale is due to a change in employment,health,or unforeseen circumstances.

(True/False)

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(28)

Question 123

Indicate with a "yes" or a "no" which of the following are like-kind exchanges (assume all assets are held for business or investment purposes). a.Exchange of common stock held as an investment for land held as an investment. b.Exchange of farmland for an apartment building. c.Exchange of office furniture used in trade or business for computer used in a trade or business d.Exchange of unimproved real estate for improved real estate. e.Exchange of a pickup truck used in trade or business for bulldozer used in trade or business

(Short Answer)

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(41)

Question 124

Which of the following statements regarding involuntary conversions is incorrect?

(Multiple Choice)

4.9/5

(38)

Question 125

Showing 121 - 125 of 125

In a nontaxable exchange,Henri traded in a truck having an adjusted basis of $8,500 and a FMV of $10,000,for a new truck having a FMV of $15,000.In addition,Henri paid cash of $5,000.What is Henri's basis in the new truck?

If a principal residence is sold before satisfying the ownership and use tests,part of the gain may be excluded if the sale is due to a change in employment,health,or unforeseen circumstances.

Which of the following statements regarding involuntary conversions is incorrect?

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