Question 1

A gain on a like-kind exchange is always recognized to the extent of any boot received.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following qualify as a like-kind exchange?
-Inventory for inventory.

Accepted Answer

A) qualifies as a like-kind exchange 
B) does not qualify as a like-kind exchange 
A) qualifies as a like-kind exchange 
B) does not qualify as a like-kind exchange

Question 3

Which of the following qualify as a like-kind exchange?
-Land held as an investment for an office building and land used in a business.

Accepted Answer

A) qualifies as a like-kind exchange 
B) does not qualify as a like-kind exchange 
A) qualifies as a like-kind exchange 
B) does not qualify as a like-kind exchange

Question 4

Which of the following qualify as a like-kind exchange?
-Land held as an investment for land used in a business.

Accepted Answer

A) qualifies as a like-kind exchange 
B) does not qualify as a like-kind exchange 
A) qualifies as a like-kind exchange 
B) does not qualify as a like-kind exchange

Question 5

Which of the following statements is/are correct?
I.The carryover-holding period only applies if the property exchanged is personal-use property.
II.The holding period of like-kind property received includes the holding period of the property exchanged.
​

Accepted Answer

A) Only statement I is correct. 
B) Only statement II is correct. 
C) Both statements are correct. 
D) Neither statement is correct. 
A) Only statement I is correct. 
B) Only statement II is correct. 
C) Both statements are correct. 
D) Neither statement is correct.

Question 6

Which of the following qualifies as a like-kind exchange of property?
I.Inventory for inventory.
II.Office equipment for a delivery van.
​

Accepted Answer

A) Only statement I is correct. 
B) Only statement II is correct. 
C) Both statements are correct. 
D) Neither statement is correct. 
A) Only statement I is correct. 
B) Only statement II is correct. 
C) Both statements are correct. 
D) Neither statement is correct.

Question 7

Iris' personal residence,located in a plush suburban area,is condemned to facilitate the construction of a new freeway artery.Iris receives a condemnation award of $1,000,000.She uses the award to purchase a new residence for $1,150,000.The adjusted basis of the former residence was $1,100,000 at the date of the condemnation.Determine Iris's recognized gain or loss and the basis in the new residence.Discuss in terms of the concepts of taxation how you arrived at your answers.

Accepted Answer

Iris' realized loss of $100,000 ($1,000,

Question 8

Rosilyn trades her old business-use car with an adjusted basis of $13,000 and an outstanding loan liability balance of $2,000 for a new business-use car valued at $9,000 plus $3,000 cash from Bob's Auto Sales and Loan Company.Bob assumes Rosilyn's loan balance.How much boot does Rosilyn receive in the transaction?

Accepted Answer

A) $- 0 - 
B) $1,000 
C) $2,000 
D) $3,000 
E) $5,000 
A) $- 0 - 
B) $1,000 
C) $2,000 
D) $3,000 
E) $5,000

Question 9

Roscoe receives real estate appraised at $200,000 and cash of $10,000 from Cathy in exchange for his investment realty with a basis of $170,000.Roscoe plans to hold the new realty for investment.What is his recognized gain?

Accepted Answer

A) $- 0 - 
B) $10,000 
C) $20,000 
D) $30,000 
E) $40,000 
A) $- 0 - 
B) $10,000 
C) $20,000 
D) $30,000 
E) $40,000

Question 10

Which of the following qualify as a like-kind exchange?
-An airplane for a duplex apartment.

Accepted Answer

A) qualifies as a like-kind exchange 
B) does not qualify as a like-kind exchange 
A) qualifies as a like-kind exchange 
B) does not qualify as a like-kind exchange

Question 11

Rationale for nonrecognition includes which of the following?
I.A refinement of the realization concept,which postpones recognition of appreciation in value until the taxpayer disposes of a property,or its replacement.
II.Under the Substance-over-form doctrine,new property acquired in a transaction is viewed as a continuation of the original investment.
III.The taxpayer lacks wherewithal to pay the tax on a realized gain because the amount realized on the transaction is reinvested in the replacement asset.
​

Accepted Answer

A) Only II is correct. 
B) Only I is correct. 
C) II and III are correct. 
D) I, II, and III are correct. 
E) Only III is correct. 
A) Only II is correct. 
B) Only I is correct. 
C) II and III are correct. 
D) I, II, and III are correct. 
E) Only III is correct.

Question 12

Simon exchanged his Mustang for Michael's Econovan so that he could go hunting.The exchange does not qualify as a like-kind exchange since the assets are personal.

Accepted Answer

A) True 
 B)False

Question 13

Robbie and Mike exchange machinery in a qualified like-kind exchange.Robbie's old machine,which originally cost $42,000,has an adjusted basis of $26,000.His old machine is worth $32,000.Since the machine Mike is trading is worth only $27,000 (Mike's basis is $18,000),Mike will even up the exchange by giving Robbie $5,000 in cash.
a.What is Robbie's realized gain (loss) on the machine?
b.What is Robbie's recognized gain (loss) on the machine?
c.What is the character of Robbie's gain or loss on the machine?
d.What is Robbie's basis in his new machine?

Accepted Answer

The answer of Robbie and Mike exchange machinery in a...

Question 14

The general mechanism used to defer gains and losses from a transaction includes certain adjustments to the fair market value of the replacement property.These adjustments include
I.adding boot received.
II.subtracting deferred gains.
​

Accepted Answer

A) Only statement I is correct. 
B) Only statement II is correct. 
C) Both statements are correct. 
D) Neither statement is correct. 
A) Only statement I is correct. 
B) Only statement II is correct. 
C) Both statements are correct. 
D) Neither statement is correct.

Question 15

Charlotte's apartment building that has an adjusted basis of $200,000 is destroyed by fire.Early the following year,Charlotte receives a $425,000 insurance check and reinvests $400,000 of the proceeds in an apartment building.What is the basis in the new building?

Accepted Answer

A) $- 0 - 
B) $425,000 
C) $400,000 
D) $200,000 
E) $175,000 
A) $- 0 - 
B) $425,000 
C) $400,000 
D) $200,000 
E) $175,000

Question 16

Rosilyn trades her old business-use car with an adjusted basis of $13,000 and an outstanding loan liability balance of $2,000 for a new business-use car valued at $9,000 plus $3,000 cash from Bob's Auto Sales and Loan Company.Bob assumes Rosilyn's loan balance.What is Rosilyn's recognized gain on the transaction?

Accepted Answer

A) $- 0 - 
B) $1,000 
C) $2,000 
D) $3,000 
E) $5,000 
A) $- 0 - 
B) $1,000 
C) $2,000 
D) $3,000 
E) $5,000

Question 17

Ed and Elise got married during the year and they each sold their homes to buy a new house for them to live in.As long as they file a joint return they can each claim a $250,000 exclusion.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following exchanges of property are like-kind exchanges?
I.Convenience store owner trades several cases of potato chips for a cash register.
II.A completely rented apartment building traded for a parts supply warehouse to use in business.
​

Accepted Answer

A) Only statement I is correct. 
B) Only statement II is correct. 
C) Both statements are correct. 
D) Neither statement is correct. 
A) Only statement I is correct. 
B) Only statement II is correct. 
C) Both statements are correct. 
D) Neither statement is correct.

Question 19

Which of the following qualify as a like-kind exchange?
-A business use automobile for a personal use automobile.

Accepted Answer

A) qualifies as a like-kind exchange 
B) does not qualify as a like-kind exchange 
A) qualifies as a like-kind exchange 
B) does not qualify as a like-kind exchange

Question 20

Which of the following is/are correct regarding the deferral of gain attributable to the involuntary conversion of personal property (personalty)?
I.Gain deferral is mandatory.
II.Replacement property must be acquired within one year of the close of the tax year in which gain is realized from an involuntary property damage conversion.
​

Accepted Answer

A) Only statement I is correct. 
B) Only statement II is correct. 
C) Both statements are correct. 
D) Neither statement is correct. 
A) Only statement I is correct. 
B) Only statement II is correct. 
C) Both statements are correct. 
D) Neither statement is correct.

A gain on a like-kind exchange is always recognized to the extent of any boot received.

Which of the following qualify as a like-kind exchange? -Inventory for inventory.

Which of the following qualify as a like-kind exchange? -Land held as an investment for an office building and land used in a business.

Which of the following qualify as a like-kind exchange? -Land held as an investment for land used in a business.

Which of the following statements is/are correct? I.The carryover-holding period only applies if the property exchanged is personal-use property. II.The holding period of like-kind property received includes the holding period of the property exchanged.

Which of the following qualifies as a like-kind exchange of property? I.Inventory for inventory. II.Office equipment for a delivery van.

Roscoe receives real estate appraised at $200,000 and cash of $10,000 from Cathy in exchange for his investment realty with a basis of $170,000.Roscoe plans to hold the new realty for investment.What is his recognized gain?

Which of the following qualify as a like-kind exchange? -An airplane for a duplex apartment.

Simon exchanged his Mustang for Michael's Econovan so that he could go hunting.The exchange does not qualify as a like-kind exchange since the assets are personal.

The general mechanism used to defer gains and losses from a transaction includes certain adjustments to the fair market value of the replacement property.These adjustments include I.adding boot received. II.subtracting deferred gains.

Charlotte's apartment building that has an adjusted basis of $200,000 is destroyed by fire.Early the following year,Charlotte receives a $425,000 insurance check and reinvests $400,000 of the proceeds in an apartment building.What is the basis in the new building?

Ed and Elise got married during the year and they each sold their homes to buy a new house for them to live in.As long as they file a joint return they can each claim a $250,000 exclusion.

Which of the following exchanges of property are like-kind exchanges? I.Convenience store owner trades several cases of potato chips for a cash register. II.A completely rented apartment building traded for a parts supply warehouse to use in business.

Which of the following qualify as a like-kind exchange? -A business use automobile for a personal use automobile.

Federal Income Taxation-An Overview

Income Tax Concepts

Income Sources

Income Exclusions

Introduction to Business Expenses

Business Expenses

Losses-Deductions and Limitations

Taxation of Individuals

Acquisitions of Property

Cost Recovery on Property: Depreciation, depletion, and Amortization

Property Dispositions

Choice of Business Entity-General Tax and Nontax Factorsformation

Choice of Business Entity-Operations and Distributions

Choice of Business Entity-Other Considerations

Tax Research

Filters

Exam 12: Non-Recognition Transactions

A gain on a like-kind exchange is always recognized to the extent of any boot received.

Which of the following qualify as a like-kind exchange? -Inventory for inventory.

Which of the following qualify as a like-kind exchange? -Land held as an investment for an office building and land used in a business.

Which of the following qualify as a like-kind exchange? -Land held as an investment for land used in a business.

Which of the following statements is/are correct? I.The carryover-holding period only applies if the property exchanged is personal-use property. II.The holding period of like-kind property received includes the holding period of the property exchanged. ​

Which of the following qualifies as a like-kind exchange of property? I.Inventory for inventory. II.Office equipment for a delivery van. ​

Roscoe receives real estate appraised at $200,000 and cash of $10,000 from Cathy in exchange for his investment realty with a basis of $170,000.Roscoe plans to hold the new realty for investment.What is his recognized gain?

Which of the following qualify as a like-kind exchange? -An airplane for a duplex apartment.

Simon exchanged his Mustang for Michael's Econovan so that he could go hunting.The exchange does not qualify as a like-kind exchange since the assets are personal.

The general mechanism used to defer gains and losses from a transaction includes certain adjustments to the fair market value of the replacement property.These adjustments include I.adding boot received. II.subtracting deferred gains. ​

Charlotte's apartment building that has an adjusted basis of $200,000 is destroyed by fire.Early the following year,Charlotte receives a $425,000 insurance check and reinvests $400,000 of the proceeds in an apartment building.What is the basis in the new building?

Ed and Elise got married during the year and they each sold their homes to buy a new house for them to live in.As long as they file a joint return they can each claim a $250,000 exclusion.

Which of the following exchanges of property are like-kind exchanges? I.Convenience store owner trades several cases of potato chips for a cash register. II.A completely rented apartment building traded for a parts supply warehouse to use in business. ​

Which of the following qualify as a like-kind exchange? -A business use automobile for a personal use automobile.

Federal Income Taxation-An Overview

Income Tax Concepts

Income Sources

Income Exclusions

Introduction to Business Expenses

Business Expenses

Losses-Deductions and Limitations

Taxation of Individuals

Acquisitions of Property

Cost Recovery on Property: Depreciation, depletion, and Amortization

Property Dispositions

Choice of Business Entity-General Tax and Nontax Factorsformation

Choice of Business Entity-Operations and Distributions

Choice of Business Entity-Other Considerations

Tax Research

Filters

Which of the following statements is/are correct? I.The carryover-holding period only applies if the property exchanged is personal-use property. II.The holding period of like-kind property received includes the holding period of the property exchanged.

Which of the following qualifies as a like-kind exchange of property? I.Inventory for inventory. II.Office equipment for a delivery van.

The general mechanism used to defer gains and losses from a transaction includes certain adjustments to the fair market value of the replacement property.These adjustments include I.adding boot received. II.subtracting deferred gains.

Which of the following exchanges of property are like-kind exchanges? I.Convenience store owner trades several cases of potato chips for a cash register. II.A completely rented apartment building traded for a parts supply warehouse to use in business.