Question 1

For § 1245 recapture to apply,accelerated depreciation must have been taken on the property.

Accepted Answer

A) True 
 B)False

Question 2

Describe the circumstances in which the maximum unrecaptured § 1250 gain (25% gain)does not become part of the Schedule D netting process for an individual taxpayer?

Accepted Answer

Unrecaptured § 1250 gain (25% gain)is so

Question 3

If § 1231 asset casualty gains and losses net to a gain,the gain is treated as a § 1231 gain.

Accepted Answer

A) True 
 B)False

Question 4

A business machine purchased April 10,2013,for $62,000 was fully depreciated in 2013 using § 179 immediate expensing.On August 15,2014,the sole proprietor who owned the machine gave it to his son.On that date,the machine's fair market value was $57,000.The son did not use the machine in business or hold it as inventory and the machine was sold on November 22,2014,for $53,000.What is the amount and nature of the gain or loss from disposition of the machine? Where is it reported in the son's tax return?

Accepted Answer

A gift does not extinguish potential § 1

Question 5

Part III of Form 4797 is used to report gains from the sale of depreciable business equipment sold at a gain and held more than one year.

Accepted Answer

A) True 
 B)False

Question 6

The maximum § 1245 depreciation recapture generally equals the accumulated depreciation.

Accepted Answer

A) True 
 B)False

Question 7

A business machine purchased April 10,2012,for $98,000 was fully depreciated in 2012 using § 179 immediate expensing.On August 15,2014,the machine was sold for $67,000.What is the amount and nature of the gain or loss from disposition of the machine?

Accepted Answer

The machine was a § 1231 asset because i

Question 8

The chart below describes the § 1231 assets sold by the Ecru Company (a sole proprietorship)this year.Compute the gain or loss from each asset disposition and determine the net § 1231 gain treated as long­term capital gain for the year.Assume there is a § 1231 lookback loss of $4,000.

Accepted Answer

The stamping machine ($21,736),tractor (

Question 9

Verway,Inc. ,has a 2014 net § 1231 gain of $55,000 and had a $62,000 net § 1231 loss in 2013.For 2014,Verway's net § 1231 gain is treated as:

Accepted Answer

A) $55,000 ordinary loss. 
B) $55,000 ordinary gain. 
C) $55,000 capital loss. 
D) $55,000 capital gain. 
E) None of these. 
A) $55,000 ordinary loss. 
B) $55,000 ordinary gain. 
C) $55,000 capital loss. 
D) $55,000 capital gain. 
E) None of these.

Question 10

Vertigo,Inc. ,has a 2014 net § 1231 loss of $64,000 and had a $32,000 net § 1231 gain in 2013.For 2014,Vertigo's net § 1231 loss is treated as:

Accepted Answer

A) Ordinary loss. 
B) Ordinary gain. 
C) Capital loss. 
D) Capital gain. 
E) None of these. 
A) Ordinary loss. 
B) Ordinary gain. 
C) Capital loss. 
D) Capital gain. 
E) None of these.

For § 1245 recapture to apply,accelerated depreciation must have been taken on the property.

Describe the circumstances in which the maximum unrecaptured § 1250 gain (25% gain)does not become part of the Schedule D netting process for an individual taxpayer?

If § 1231 asset casualty gains and losses net to a gain,the gain is treated as a § 1231 gain.

Part III of Form 4797 is used to report gains from the sale of depreciable business equipment sold at a gain and held more than one year.

The maximum § 1245 depreciation recapture generally equals the accumulated depreciation.

A business machine purchased April 10,2012,for $98,000 was fully depreciated in 2012 using § 179 immediate expensing.On August 15,2014,the machine was sold for $67,000.What is the amount and nature of the gain or loss from disposition of the machine?

The chart below describes the § 1231 assets sold by the Ecru Company (a sole proprietorship)this year.Compute the gain or loss from each asset disposition and determine the net § 1231 gain treated as longterm capital gain for the year.Assume there is a § 1231 lookback loss of $4,000.

Verway,Inc. ,has a 2014 net § 1231 gain of $55,000 and had a $62,000 net § 1231 loss in 2013.For 2014,Verway's net § 1231 gain is treated as:

Vertigo,Inc. ,has a 2014 net § 1231 loss of $64,000 and had a $32,000 net § 1231 gain in 2013.For 2014,Vertigo's net § 1231 loss is treated as:

An Introduction to Taxation and Understanding the Federal Tax Law

Working With the Tax Law

Tax Formula and Tax Determination;an Overview of Property Transactions

Gross Income: Concepts and Inclusions

Gross Income: Exclusions

Deductions and Losses: in General

Deductions and Losses: Certain Business Expenses and Losses

Depreciation, cost Recovery, amortization, and Depletion

Deductions: Employee and Self-Employed-Related Expenses

Deductions and Losses: Certain Itemized Deductions

Investor Losses

Alternative Minimum Tax

Tax Credits and Payment Procedures

Property Transactions: Determination of Gain or Loss and Basis Considerations

Property Transactions: Nontaxable Exchanges

Property Transactions: Capital Gains and Losses

Accounting Periods and Methods

Deferred Compensation

Corporations and Partnerships

Filters

Exam 17: Property Transactions: 1231 and Recapture Provisions

For § 1245 recapture to apply,accelerated depreciation must have been taken on the property.

Describe the circumstances in which the maximum unrecaptured § 1250 gain (25% gain)does not become part of the Schedule D netting process for an individual taxpayer?

If § 1231 asset casualty gains and losses net to a gain,the gain is treated as a § 1231 gain.

Part III of Form 4797 is used to report gains from the sale of depreciable business equipment sold at a gain and held more than one year.

The maximum § 1245 depreciation recapture generally equals the accumulated depreciation.

A business machine purchased April 10,2012,for $98,000 was fully depreciated in 2012 using § 179 immediate expensing.On August 15,2014,the machine was sold for $67,000.What is the amount and nature of the gain or loss from disposition of the machine?

The chart below describes the § 1231 assets sold by the Ecru Company (a sole proprietorship)this year.Compute the gain or loss from each asset disposition and determine the net § 1231 gain treated as long­term capital gain for the year.Assume there is a § 1231 lookback loss of $4,000.

Verway,Inc. ,has a 2014 net § 1231 gain of $55,000 and had a $62,000 net § 1231 loss in 2013.For 2014,Verway's net § 1231 gain is treated as:

Vertigo,Inc. ,has a 2014 net § 1231 loss of $64,000 and had a $32,000 net § 1231 gain in 2013.For 2014,Vertigo's net § 1231 loss is treated as:

An Introduction to Taxation and Understanding the Federal Tax Law

Working With the Tax Law

Tax Formula and Tax Determination;an Overview of Property Transactions

Gross Income: Concepts and Inclusions

Gross Income: Exclusions

Deductions and Losses: in General

Deductions and Losses: Certain Business Expenses and Losses

Depreciation, cost Recovery, amortization, and Depletion

Deductions: Employee and Self-Employed-Related Expenses

Deductions and Losses: Certain Itemized Deductions

Investor Losses

Alternative Minimum Tax

Tax Credits and Payment Procedures

Property Transactions: Determination of Gain or Loss and Basis Considerations

Property Transactions: Nontaxable Exchanges

Property Transactions: Capital Gains and Losses

Accounting Periods and Methods

Deferred Compensation

Corporations and Partnerships

Filters

The chart below describes the § 1231 assets sold by the Ecru Company (a sole proprietorship)this year.Compute the gain or loss from each asset disposition and determine the net § 1231 gain treated as longterm capital gain for the year.Assume there is a § 1231 lookback loss of $4,000.