Question 1

Misha traded computer equipment used in her business to a computer dealer for some new computer equipment. Misha originally purchased the computer equipment for $14,900, and it had an adjusted basis of $11,020 at the time of the exchange.The computer equipment was worth $13,000 at the time of the exchange. Misha also received a used copier worth $1,990 in the transaction. What is Misha's realized and recognized gain/loss on the exchange?

Accepted Answer

${{[a(5)]:#,###}} realized and recognize...

Question 2

Suzanne, an individual, began business four years ago and has never sold a §1231 asset. Suzanne owned each of the assets for several years. In the current year, Suzanne sold the following business assets:
  Assuming Suzanne's marginal ordinary income tax rate is 32 percent, what is the character of the gains and losses and what affect do they have on Suzanne's tax liability?

Accepted Answer

$6,000 ordinary gain, $12,000 unrecaptur...

Question 3

Brad sold a rental house that he owned for $250,000. Brad bought the rental house five years ago for $225,000 and has claimed $50,000 of depreciation expense. What is the amount and character of Brad's gain or loss?

Accepted Answer

A)  $25,000 ordinary and $50,000 unrecaptured §1250 gain.
B)  $25,000 §1231 gain and $50,000 unrecaptured §1250 gain.
C)  $25,000 capital and $50,000 ordinary gain.
D)  $75,000 ordinary gain.
E)  None of the choices are correct.F) A) and B)
G) B) and C)

Question 4

Brandy sold a rental house that she owned for $150,000. Brandy bought the house four years ago for $140,000 and has claimed $25,000 of depreciation expense. What is the amount and character of Brandy's gain or loss?

Accepted Answer

$10,000 §1231 gain and $25,000 unrecaptu...

Question 5

Which of the following is not true regarding an asset's adjusted basis?

Accepted Answer

A)  Tax-adjusted basis is usually greater than book-adjusted basis.
B)  Tax-adjusted basis is usually less than book-adjusted basis.
C)  Adjusted basis is cost basis less cost recovery deductions.
D)  Tax-adjusted basis may change over time.E) B) and C)
F) C) and D)

Question 6

Maryexchanged an office building used in her business for some land. Mary originally purchased the building for $45,000, and it had an adjusted basis of $20,000 at the time of the exchange. The land had a fair market value of $40,000. Mary also gave $4,000 to the seller in the transaction. What is Mary's adjusted basis in the land after the exchange?

Accepted Answer

A)  $20,000.
B)  $24,000.
C)  $36,000.
D)  $40,000.
E)  None of the choices are correct.F) None of the above
G) A) and D)

Question 7

Alexandra sold equipment that she uses in her business for $100,700. Alexandra bought the equipment two years ago for $90,350 and has claimed $18,525 of depreciation expense. What is the amount and character of Alexandra's gain or loss?

Accepted Answer

${{[a(6)]:#,###}} ordinary gain, and ${{...

Question 8

Which of the following is true regarding the §1231 look-back rule?

Accepted Answer

A)  It only applies when a §1231 loss occurs.
B)  It only applies when a §1231 gain occurs.
C)  It only applies when a §1231 gain occurs and there is a nonrecaptured §1231 loss in the prior five years.
D)  It only applies when a §1231 gain occurs and there is a nonrecaptured §1231 gain in the prior five years.
E)  None of the choices are correct.F) C) and D)
G) A) and D)

Question 9

The §1231 look-back rule recharacterizes §1231 gains if §1231 losses have created ordinary losses in the last five years.

Accepted Answer

A) True 
 B)False

Question 10

Assets held for investment and personal use assets are examples of capital assets.

Accepted Answer

A) True 
 B)False

Question 11

Realized gains are recognized unless there is specific exception.

Accepted Answer

A) True 
 B)False

Question 12

Unrecaptured §1250 gains apply only to individuals.

Accepted Answer

A) True 
 B)False

Exam 11: Property Dispositions

Correct Answer
verified
${{[a(5)]:#,###}} realized and recognize...
View Answer

Assets held for investment and personal use assets are examples of capital assets.

Correct Answer
verified

Brandy sold a rental house that she owned for $150,000. Brandy bought the house four years ago for $140,000 and has claimed $25,000 of depreciation expense. What is the amount and character of Brandy's gain or loss?

Correct Answer
verified
$10,000 §1231 gain and $25,000 unrecaptu...
View Answer

Unrecaptured §1250 gains apply only to individuals.

Correct Answer
verified

Correct Answer
verified
$6,000 ordinary gain, $12,000 unrecaptur...
View Answer

Correct Answer
verified

The §1231 look-back rule recharacterizes §1231 gains if §1231 losses have created ordinary losses in the last five years.

Correct Answer
verified

Alexandra sold equipment that she uses in her business for $100,700. Alexandra bought the equipment two years ago for $90,350 and has claimed $18,525 of depreciation expense. What is the amount and character of Alexandra's gain or loss?

Correct Answer
verified
${{[a(6)]:#,###}} ordinary gain, and ${{...
View Answer

Brad sold a rental house that he owned for $250,000. Brad bought the rental house five years ago for $225,000 and has claimed $50,000 of depreciation expense. What is the amount and character of Brad's gain or loss?

Correct Answer
verified

Realized gains are recognized unless there is specific exception.

Correct Answer
verified

Which of the following is not true regarding an asset's adjusted basis?

Correct Answer
verified

Which of the following is true regarding the §1231 look-back rule?

Correct Answer
verified

Exam 11: Property Dispositions

Correct Answerverified${{[a(5)]:#,###}} realized and recognize...View AnswerShow Answer

Assets held for investment and personal use assets are examples of capital assets.

Correct AnswerverifiedShow Answer

Brandy sold a rental house that she owned for $150,000. Brandy bought the house four years ago for $140,000 and has claimed $25,000 of depreciation expense. What is the amount and character of Brandy's gain or loss?

Correct Answerverified$10,000 §1231 gain and $25,000 unrecaptu...View AnswerShow Answer

Unrecaptured §1250 gains apply only to individuals.

Correct AnswerverifiedShow Answer

Correct Answerverified$6,000 ordinary gain, $12,000 unrecaptur...View AnswerShow Answer

Correct AnswerverifiedShow Answer

The §1231 look-back rule recharacterizes §1231 gains if §1231 losses have created ordinary losses in the last five years.

Correct AnswerverifiedShow Answer

Alexandra sold equipment that she uses in her business for $100,700. Alexandra bought the equipment two years ago for $90,350 and has claimed $18,525 of depreciation expense. What is the amount and character of Alexandra's gain or loss?

Correct Answerverified${{[a(6)]:#,###}} ordinary gain, and ${{...View AnswerShow Answer

Brad sold a rental house that he owned for $250,000. Brad bought the rental house five years ago for $225,000 and has claimed $50,000 of depreciation expense. What is the amount and character of Brad's gain or loss?

Correct AnswerverifiedShow Answer

Realized gains are recognized unless there is specific exception.

Correct AnswerverifiedShow Answer

Which of the following is not true regarding an asset's adjusted basis?

Correct AnswerverifiedShow Answer

Which of the following is true regarding the §1231 look-back rule?

Correct AnswerverifiedShow Answer

Correct Answer
verified
${{[a(5)]:#,###}} realized and recognize...
View Answer

Correct Answer
verified

Correct Answer
verified
$10,000 §1231 gain and $25,000 unrecaptu...
View Answer

Correct Answer
verified

Correct Answer
verified
$6,000 ordinary gain, $12,000 unrecaptur...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
${{[a(6)]:#,###}} ordinary gain, and ${{...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified