Question 1

A parcel of land is always a capital asset.

Accepted Answer

A) True 
 B)False

Question 2

Explain whether the sale at a loss of a machine used in a trade or business generates an ordinary or capital loss?

Accepted Answer

The sale at a loss of a machine used in ...

Question 3

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 4

Which of the following may qualify as an installment sale?

Accepted Answer

A)   Sale of inventory at a gain.
B)   Sale of securities.
C)   Sale of asset used in a business at a gain.
D)   Land sold at a loss.
E)   All of the choices qualify for installment sale treatment.F) B) and D)
G) All of the above

Question 5

Mary exchanged 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) B) and D)
G) C) and E)

Question 6

What is the character of land used in an active trade or business for two years?

Accepted Answer

A)   Capital.
B)   Ordinary.
C)   §1231.
D)   Investment.
E)   None of the choices are correct.F) B) and E)
G) B) and D)

Question 7

An asset's tax-adjusted basis is usually greater than its book-adjusted basis.

Accepted Answer

A) True 
 B)False

Question 8

Unrecaptured §1250 gain is taxed at a maximum rate of 25 percent.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A)   $7,000 ordinary income, $1,000 §1231 loss, and $1,920 tax liability.
B)   $6,000 ordinary income and $1,920 tax liability.
C)   $7,000 §1231 gain and $2,240 tax liability.
D)   $7,000 §1231 gain and $1,050 tax liability.
E)   None of the choices are correct.F) A) and D)
G) All of the above

Question 10

In a deferred like-kind exchange, the like-kind property to be received must be identified within 45 days and acquired within 180 days from the initial exchange.

Accepted Answer

A) True 
 B)False

Exam 3: Property Dispositions

Correct Answer
verified

Unrecaptured §1250 gain is taxed at a maximum rate of 25 percent.

Correct Answer
verified

In a deferred like-kind exchange, the like-kind property to be received must be identified within 45 days and acquired within 180 days from the initial exchange.

Correct Answer
verified

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

Correct Answer
verified

Which of the following may qualify as an installment sale?

Correct Answer
verified

What is the character of land used in an active trade or business for two years?

Correct Answer
verified

A parcel of land is always a capital asset.

Correct Answer
verified

Correct Answer
verified

An asset's tax-adjusted basis is usually greater than its book-adjusted basis.

Correct Answer
verified

Explain whether the sale at a loss of a machine used in a trade or business generates an ordinary or capital loss?

Correct Answer
verified
The sale at a loss of a machine used in ...
View Answer

Exam 3: Property Dispositions

Correct AnswerverifiedShow Answer

Unrecaptured §1250 gain is taxed at a maximum rate of 25 percent.

Correct AnswerverifiedShow Answer

In a deferred like-kind exchange, the like-kind property to be received must be identified within 45 days and acquired within 180 days from the initial exchange.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following may qualify as an installment sale?

Correct AnswerverifiedShow Answer

What is the character of land used in an active trade or business for two years?

Correct AnswerverifiedShow Answer

A parcel of land is always a capital asset.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

An asset's tax-adjusted basis is usually greater than its book-adjusted basis.

Correct AnswerverifiedShow Answer

Explain whether the sale at a loss of a machine used in a trade or business generates an ordinary or capital loss?

Correct AnswerverifiedThe sale at a loss of a machine used in ...View AnswerShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The sale at a loss of a machine used in ...
View Answer