FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 3: Property Dispositions

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 31

Short Answer

Review LaterAdd Note

Review Later

Andrea sold a piece of machinery she used in her business for 9 months.The amount realized was $50,000 and the adjusted basis was $55,000.What is Andrea's gain or loss realized and what is the character of the gain or loss?

Correct Answer

verified

$5,000 ordinary loss.
The real...

View Answer

Show Answer

Question 32

True/False

Review LaterAdd Note

Review Later

For corporations,§291 recaptures 20 percent of the lesser of depreciation taken or the realized gain as ordinary income.

A) True
B) False

Correct Answer

verified

Show Answer

Question 33

Multiple Choice

Review LaterAdd Note

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

Sandra sold some equipment for $10,000 in cash,$1,000 of office products,the buyer assumption of her $1,500 loan,and incurred selling expenses of $500.What is the Sandra's amount realized in the transaction?

All tax gains and losses are ultimately characterized as either ordinary or capital.

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 35 percent,what is the character of the gains and losses and what affect do they have on Suzanne's tax liability?

Silver sold machinery to Gold,a related entity,which it used in its business for $55,000.Silver bought the equipment a few years ago for $50,000 and has claimed $15,000 of depreciation expense.What is the amount and character of Silver's gain?

Which of the following gains does not result solely in an ordinary gain or loss?

For a like-kind exchange,realized gain is deferred if the exchange is solely for like-kind property.

Which of the following is NOT a §1245 asset if held for more than one year?

How long after the initial exchange does a taxpayer have to identify replacement property in a like-kind exchange?

Sunshine LLC sold furniture for $75,000.Sunshine bought the furniture for $90,000 several years ago and has claimed $25,000 of depreciation expense on the machine.What is the amount and character of Sunshine's gain or loss?

The §1231 look-back rule applies whether there is a net gain or loss.

A parcel of land is always a capital asset.

Which of the following sections recaptures or recharacterizes only corporate taxpayer's gains?

Losses on sales between related parties are realized but not recognized.

The gain or loss realized on the sale of an asset is always recognized for tax purposes.

Which of the following is true regarding depreciation recapture?

Jessie sold a piece of land held for investment for $250,000.Jessie bought the land two years ago for $195,000.What is the amount and character of Jessie's gain?

Redoubt LLC traded machinery used in its business to a machinery dealer for some new machinery.Redoubt originally purchased the machinery for $80,000 and it had an adjusted basis of $53,000 at the time of the exchange.The new machinery had a fair market value of $62,000.Redoubt also received $7,000 of computer equipment in the transaction.What is Redoubt's gain or loss recognized on the exchange?