Question 1

Only accelerated depreciation is recaptured for §1245 assets.

Accepted Answer

A) True 
 B)False

Question 2

Boot is not like-kind property involved in a like-kind exchange.

Accepted Answer

A) True 
 B)False

Question 3

Sadie sold 10 shares of stock to her brother, George, for $500 six months ago. Sadie had purchased the stock for $600 two years earlier. If George sells the stock for $700 six months later, what is the amount and character of his recognized gain or loss in the current year?

Accepted Answer

A)   $0.
B)   $100 short-term capital gain.
C)   $100 long-term capital gain.
D)  $200 short-term capital gain.
E)  None of theseF) A) and E)
G) C) and E)

Question 4

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 D)
F) B) and C)

Question 5

The §1231 look-back rule recharacterizes §1231 gains if §1231 losses have created ordinary losses in the last 5 years.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

The adjusted basis is the cost basis less cost recovery deductions.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following realized gains results in a recognized gain?

Accepted Answer

A)   Farm machinery traded for farm machinery.
B)   Sale to a related party.
C)   Involuntary conversion.
D)  Iowa cropland exchanged for a Minnesota warehouse.E) None of the above
F) A) and B)

Question 9

A loss realized for property destroyed in a hurricane is deferred under the involuntary conversion rules.

Accepted Answer

A) True 
 B)False

Question 10

Ordinary gains and losses are obtained on the sale of investments.
Capital gains and losses are obtained on the sale of investments.

Accepted Answer

A) True 
 B)False

Exam 3: Property Dispositions

Which of the following realized gains results in a recognized gain?

Correct Answer
verified

The adjusted basis is the cost basis less cost recovery deductions.

Correct Answer
verified

A loss realized for property destroyed in a hurricane is deferred under the involuntary conversion rules.

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Boot is not like-kind property involved in a like-kind exchange.

Correct Answer
verified

Only accelerated depreciation is recaptured for §1245 assets.

Correct Answer
verified

Ordinary gains and losses are obtained on the sale of investments. Capital gains and losses are obtained on the sale of investments.

Correct Answer
verified

The §1231 look-back rule recharacterizes §1231 gains if §1231 losses have created ordinary losses in the last 5 years.

Correct Answer
verified

Sadie sold 10 shares of stock to her brother, George, for $500 six months ago. Sadie had purchased the stock for $600 two years earlier. If George sells the stock for $700 six months later, what is the amount and character of his recognized gain or loss in the current year?

Correct Answer
verified

Exam 3: Property Dispositions

Which of the following realized gains results in a recognized gain?

Correct AnswerverifiedShow Answer

The adjusted basis is the cost basis less cost recovery deductions.

Correct AnswerverifiedShow Answer

A loss realized for property destroyed in a hurricane is deferred under the involuntary conversion rules.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Boot is not like-kind property involved in a like-kind exchange.

Correct AnswerverifiedShow Answer

Only accelerated depreciation is recaptured for §1245 assets.

Correct AnswerverifiedShow Answer

Ordinary gains and losses are obtained on the sale of investments. Capital gains and losses are obtained on the sale of investments.

Correct AnswerverifiedShow Answer

The §1231 look-back rule recharacterizes §1231 gains if §1231 losses have created ordinary losses in the last 5 years.

Correct AnswerverifiedShow Answer

Sadie sold 10 shares of stock to her brother, George, for $500 six months ago. Sadie had purchased the stock for $600 two years earlier. If George sells the stock for $700 six months later, what is the amount and character of his recognized gain or loss in the current year?

Correct AnswerverifiedShow Answer

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