Question 1

If land were an investment held in a trade or business,the gain or loss would be reported on Schedule D.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is Section 1231 property?

Accepted Answer

A) Accounts receivable. 
B) A building used in a trade or business. 
C) Inventory. 
D) Copyright owned by the author. 
A) Accounts receivable. 
B) A building used in a trade or business. 
C) Inventory. 
D) Copyright owned by the author.

Question 3

The following is true if land is sold except:

Accepted Answer

A) The gain on the sale of land used in a business is ordinary income and can appear on a Schedule C if it is owned by a sole proprietor. 
B) The gain on the sale of land used in a business is recorded on Schedule D. 
C) The gain on the sale of land used in a business is recorded on Form 4797. 
D) The gain on the sale of land appears on the Form 1040 under the heading "other income". 
A) The gain on the sale of land used in a business is ordinary income and can appear on a Schedule C if it is owned by a sole proprietor. 
B) The gain on the sale of land used in a business is recorded on Schedule D. 
C) The gain on the sale of land used in a business is recorded on Form 4797. 
D) The gain on the sale of land appears on the Form 1040 under the heading "other income".

Question 4

Property owned by a taxpayer and used either for personal purposes,investment,or in a trade or business is a capital asset.

Accepted Answer

A) True 
 B)False

Question 5

All gains and losses on the sale of property that was held for more than one year is subject to preferential tax rates.

Accepted Answer

A) True 
 B)False

Question 6

Section 1202 allows for an exclusion of up to 50% of the eligible gain on the sale or exchange of qualified small business stock if held for more than one year.

Accepted Answer

A) True 
 B)False

Question 7

In 2016,Linda gave her son,Jonathan 425 shares of School Products Inc.,common stock.Linda paid $9,350 for the stock in 2010.At the date of the gift,the FMV of the stock was $6,800.Assuming that there is no gift tax paid,if Jonathan sells the stock for $6,000,he will recognize:

Accepted Answer

A) $3,350 loss. 
B) no gain or loss. 
C) $3,450 loss. 
D) $800 loss. 
A) $3,350 loss. 
B) no gain or loss. 
C) $3,450 loss. 
D) $800 loss.

Question 8

When the buyer assumes the seller's liability,the seller includes this amount in computing the amount realized from the sale.

Accepted Answer

A) True 
 B)False

Question 9

Stephanie sold the following stock in 2016.She received a 1099-B from each of the companies to record the sale.
   a.Complete the following table:
   b.Calculate the short-term gain loss)after netting.
c.Calculate the long-term gain loss)after netting.
d.What is the resulting gain loss)to be shown on the return?

Accepted Answer

The answer of Stephanie sold the following stock in 2016.She...

Question 10

Which one of the following is a capital asset?

Accepted Answer

A) A non-musical copyright created by the taxpayer. 
B) Rental property. 
C) Business inventory. 
D) Household furnishings. 
A) A non-musical copyright created by the taxpayer. 
B) Rental property. 
C) Business inventory. 
D) Household furnishings.

Question 11

Oliver purchased the following stock of Doggie Treats Inc., 2014 10 shares @ $10
2015 10 shares @ $12
2016 20 shares @ $14
If Oliver sold 25 shares of stock in 2016 for $265,what is the loss on the sale of the stock? Assume the shares purchased in 2015 were held for more than one year.

Accepted Answer

A) $9.50 long-term loss and $38.00 short-term loss. 
B) $8.00 short-term loss and $17.00 long-term loss. 
C) $8.00 long-term loss and $17.00 short-term loss. 
D) $9.50 short-term loss and $38.00 long-term loss. 
A) $9.50 long-term loss and $38.00 short-term loss. 
B) $8.00 short-term loss and $17.00 long-term loss. 
C) $8.00 long-term loss and $17.00 short-term loss. 
D) $9.50 short-term loss and $38.00 long-term loss.

Question 12

Lourdes,a sole proprietor,collected $8,650 on November 21,2016 on some of her outstanding receivables.Her basis in these receivables was $0.What is the gain or loss Lourdes recognizes for 2016?

Accepted Answer

A) a short-term loss as the FMV is greater than the payments received on the receivables. 
B) a short-term gain as the payments are from receivables that are always considered short-term. 
C) no gain or loss as the payments are within the normal course of business. 
D) an ordinary gain because the receivables had a FMV greater than the basis of the receivables. 
A) a short-term loss as the FMV is greater than the payments received on the receivables. 
B) a short-term gain as the payments are from receivables that are always considered short-term. 
C) no gain or loss as the payments are within the normal course of business. 
D) an ordinary gain because the receivables had a FMV greater than the basis of the receivables.

Question 13

A taxpayer purchased land in 2014 for $26,000 and sold it in 2016 for $31,000 cash.The buyer also assumed the remaining mortgage of $13,000.What is the amount recognized on the sale of the land?

Accepted Answer

A) $8,000 loss. 
B) $5,000 gain. 
C) $8,000 gain. 
D) $18,000 gain. 
A) $8,000 loss. 
B) $5,000 gain. 
C) $8,000 gain. 
D) $18,000 gain.

Question 14

Diane gifted 100 shares of Runners Link common stock with a FMV of $8,000 to her brother,Sean.The stock originally cost Diane $11,000.Sean later sells the stock on the open market for $9,000.Sean recognizes:

Accepted Answer

A) no gain or loss. 
B) a $2,000 loss. 
C) a $2,000 gain. 
D) a $1,000 gain. 
A) no gain or loss. 
B) a $2,000 loss. 
C) a $2,000 gain. 
D) a $1,000 gain.

Question 15

Francisco sells a parcel of land for $100,000 cash and the buyer also assumes Francisco's liability of $10,000.The basis of his land is $70,000.What is the gain or loss realized on the sale?

Accepted Answer

A) $10,000 gain. 
B) $30,000 gain. 
C) $20,000 gain. 
D) $40,000 gain. 
A) $10,000 gain. 
B) $30,000 gain. 
C) $20,000 gain. 
D) $40,000 gain.

Question 16

The gain or loss on land sold within one year of purchase is recorded on which one of the following forms or schedules?

Accepted Answer

A) Form 4797 if the sale was an asset held for investment purposes by a taxpayer who is a sole proprietor. 
B) Schedule C if the sale was an asset used in a trade or business of a sole proprietorship. 
C) Schedule D if the sale was an asset used in a trade or business by a sole proprietor who also files a Schedule C. 
D) Form 4797 if the sale was an asset used in a trade or business by a sole proprietor. 
A) Form 4797 if the sale was an asset held for investment purposes by a taxpayer who is a sole proprietor. 
B) Schedule C if the sale was an asset used in a trade or business of a sole proprietorship. 
C) Schedule D if the sale was an asset used in a trade or business by a sole proprietor who also files a Schedule C. 
D) Form 4797 if the sale was an asset used in a trade or business by a sole proprietor.

Question 17

In 2010,Niveen purchased land for $88,000 for use in her landscape business.She sold it in 2016 for $94,000.If Niveen has no other sales of business or trade property,how will this gain be taxed?

Accepted Answer

A) $6,000 long-term capital gain. 
B) $6,000 short-term capital gain. 
C) $6,000 ordinary income. 
D) $6,000 Section 1231 gain. 
A) $6,000 long-term capital gain. 
B) $6,000 short-term capital gain. 
C) $6,000 ordinary income. 
D) $6,000 Section 1231 gain.

Question 18

In 2011,Terri purchased 260 shares of Flowers R Us stock at a cost of $9,600 as an investment.In 2016,when the fair market value was $11,400,Terri gave the stock to her daughter,Michele.Assuming no gift tax was paid,if Michele sells the stock for $13,800,she will recognize:

Accepted Answer

A) $2,400 gain. 
B) $4,200 gain. 
C) $1,800 gain. 
D) no gain or loss. 
A) $2,400 gain. 
B) $4,200 gain. 
C) $1,800 gain. 
D) no gain or loss.

Question 19

A computer used exclusively in a sole proprietor's business is a capital asset.

Accepted Answer

A) True 
 B)False

Question 20

To figure the gain or loss from the sale of property received as a gift,the donor's adjusted basis at the time of the gift is the basis to the donee.

Accepted Answer

A) True 
 B)False

If land were an investment held in a trade or business,the gain or loss would be reported on Schedule D.

Which of the following is Section 1231 property?

The following is true if land is sold except:

Property owned by a taxpayer and used either for personal purposes,investment,or in a trade or business is a capital asset.

All gains and losses on the sale of property that was held for more than one year is subject to preferential tax rates.

Section 1202 allows for an exclusion of up to 50% of the eligible gain on the sale or exchange of qualified small business stock if held for more than one year.

In 2016,Linda gave her son,Jonathan 425 shares of School Products Inc.,common stock.Linda paid $9,350 for the stock in 2010.At the date of the gift,the FMV of the stock was $6,800.Assuming that there is no gift tax paid,if Jonathan sells the stock for $6,000,he will recognize:

When the buyer assumes the seller's liability,the seller includes this amount in computing the amount realized from the sale.

Which one of the following is a capital asset?

Oliver purchased the following stock of Doggie Treats Inc., 2014 10 shares @ $10 2015 10 shares @ $12 2016 20 shares @ $14 If Oliver sold 25 shares of stock in 2016 for $265,what is the loss on the sale of the stock? Assume the shares purchased in 2015 were held for more than one year.

Lourdes,a sole proprietor,collected $8,650 on November 21,2016 on some of her outstanding receivables.Her basis in these receivables was $0.What is the gain or loss Lourdes recognizes for 2016?

A taxpayer purchased land in 2014 for $26,000 and sold it in 2016 for $31,000 cash.The buyer also assumed the remaining mortgage of $13,000.What is the amount recognized on the sale of the land?

Diane gifted 100 shares of Runners Link common stock with a FMV of $8,000 to her brother,Sean.The stock originally cost Diane $11,000.Sean later sells the stock on the open market for $9,000.Sean recognizes:

Francisco sells a parcel of land for $100,000 cash and the buyer also assumes Francisco's liability of $10,000.The basis of his land is $70,000.What is the gain or loss realized on the sale?

The gain or loss on land sold within one year of purchase is recorded on which one of the following forms or schedules?

In 2010,Niveen purchased land for $88,000 for use in her landscape business.She sold it in 2016 for $94,000.If Niveen has no other sales of business or trade property,how will this gain be taxed?

In 2011,Terri purchased 260 shares of Flowers R Us stock at a cost of $9,600 as an investment.In 2016,when the fair market value was $11,400,Terri gave the stock to her daughter,Michele.Assuming no gift tax was paid,if Michele sells the stock for $13,800,she will recognize:

A computer used exclusively in a sole proprietor's business is a capital asset.

To figure the gain or loss from the sale of property received as a gift,the donor's adjusted basis at the time of the gift is the basis to the donee.

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 46 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

If land were an investment held in a trade or business,the gain or loss would be reported on Schedule D.

Which of the following is Section 1231 property?

The following is true if land is sold except:

Property owned by a taxpayer and used either for personal purposes,investment,or in a trade or business is a capital asset.

All gains and losses on the sale of property that was held for more than one year is subject to preferential tax rates.

Section 1202 allows for an exclusion of up to 50% of the eligible gain on the sale or exchange of qualified small business stock if held for more than one year.

In 2016,Linda gave her son,Jonathan 425 shares of School Products Inc.,common stock.Linda paid $9,350 for the stock in 2010.At the date of the gift,the FMV of the stock was $6,800.Assuming that there is no gift tax paid,if Jonathan sells the stock for $6,000,he will recognize:

When the buyer assumes the seller's liability,the seller includes this amount in computing the amount realized from the sale.

Which one of the following is a capital asset?

Oliver purchased the following stock of Doggie Treats Inc., 2014 10 shares @ $10 2015 10 shares @ $12 2016 20 shares @ $14 If Oliver sold 25 shares of stock in 2016 for $265,what is the loss on the sale of the stock? Assume the shares purchased in 2015 were held for more than one year.

Lourdes,a sole proprietor,collected $8,650 on November 21,2016 on some of her outstanding receivables.Her basis in these receivables was $0.What is the gain or loss Lourdes recognizes for 2016?

A taxpayer purchased land in 2014 for $26,000 and sold it in 2016 for $31,000 cash.The buyer also assumed the remaining mortgage of $13,000.What is the amount recognized on the sale of the land?

Diane gifted 100 shares of Runners Link common stock with a FMV of $8,000 to her brother,Sean.The stock originally cost Diane $11,000.Sean later sells the stock on the open market for $9,000.Sean recognizes:

Francisco sells a parcel of land for $100,000 cash and the buyer also assumes Francisco's liability of $10,000.The basis of his land is $70,000.What is the gain or loss realized on the sale?

The gain or loss on land sold within one year of purchase is recorded on which one of the following forms or schedules?

In 2010,Niveen purchased land for $88,000 for use in her landscape business.She sold it in 2016 for $94,000.If Niveen has no other sales of business or trade property,how will this gain be taxed?

In 2011,Terri purchased 260 shares of Flowers R Us stock at a cost of $9,600 as an investment.In 2016,when the fair market value was $11,400,Terri gave the stock to her daughter,Michele.Assuming no gift tax was paid,if Michele sells the stock for $13,800,she will recognize:

A computer used exclusively in a sole proprietor's business is a capital asset.

To figure the gain or loss from the sale of property received as a gift,the donor's adjusted basis at the time of the gift is the basis to the donee.

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 46 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