FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 11: Property Dispositions

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 41

Multiple Choice

Review LaterAdd Note

Review Later

Arlington LLC exchanged land used in its business for some new land. Arlington originally purchased the land it exchanged for $34,500. The new land had a fair market value of $38,250. Arlington also received $8,500 of office equipment in the transaction. What is Arlington'srecognized gain or loss on the exchange?

A) $0.
B) $8,500.
C) $3,750.
D) $12,250.
E) None of the choices are correct.

F) D) and E)
G) B) and E)

Correct Answer

verified

Show Answer

Question 42

Essay

Review LaterAdd Note

Review Later

In the current year, Raven sold machinery with a fair market value of $200,000. The machinery's original basis was $190,000 and Raven's accumulated depreciation on the machinery was $40,000, so its adjusted basis to Raven was $150,000. Raven received $50,000 in the current year and a note paying Raven $75,000 a year for two years beginning next year. What is the amount and character of the gain that Raven will recognize in the current year?

Correct Answer

verified

$42,500 gain recognized: $40,000 ordinar...

View Answer

Show Answer

Question 43

Essay

Review LaterAdd Note

Silver sold machinerythat it used in its business to Gold, a related entity, 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?

A taxpayer that receives boot in a like-kind exchange resulting in a gain recognizes as gain the lesser of the fair market value of the boot received or the gain realized.

Winchester LLC sold the following business assets during the current year: (1) automobile, $30,000 cost basis, $12,000 depreciation, $20,000 proceeds; (2) machinery, $25,000 cost basis, $20,000 depreciation, $10,000 proceeds; (3) furniture, $15,000 cost basis, $10,000 depreciation, $4,000 proceeds; (4) computer equipment, $25,000 cost basis, $6,000 depreciation, $10,000 proceeds; (5) Winchester had unrecaptured §1231 losses of $3,000 in the prior five years. What are the amount and character of Winchester's gains and losses before the §1231 netting process? Assume all assets were held for more than one year.

Ashburn reported a $104,875 net §1231 gain in Year 6. Assuming Ashburn reported $52,500 of nonrecaptured §1231 losses during Years 1 to 5, what amount of Ashburn's net §1231 gain for Year 6, if any, is treated as ordinary income?

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

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

Brandon, an individual, began business four years ago and has sold §1231 assets with $5,000 of losses within the last five years. 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? Use dividends and capital gains tax rates for reference.

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

Sadie sold 11 shares of stock to her brother, George, for $570 16 months ago. Sadie had purchased the stock for $740 two years earlier. If George sells the stock for $910, what are the amount and character of his recognized gain or loss in the current year?

Alexandra sold equipment that she uses in her business for $100,000. Alexandra bought the equipment two years ago for $90,000 and has claimed $25,000 of depreciation expense. What is the amount and character of Alexandra's gain or loss?

Arlington LLC exchanged land used in its business for some new land. Arlington originally purchased the land it exchanged for $28,000. The new land had a fair market value of $35,000. Arlington also received $2,000 of office equipment in the transaction. What is Arlington'srecognized gain or loss on the exchange?

Which one of the following is not a requirement of a deferred like-kind exchange?

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?

Which of the following is not an involuntary conversion?

When do unrecaptured §1250 gains apply?

Gainesville LLC sold the following business assets during the current year: (1)machinery, $20,000 cost basis, $4,000 depreciation, $22,000 proceeds; (2)automobile, $15,000 cost basis, $12,000 depreciation, $7,000 proceeds; (3)equipment, $15,000 cost basis, $10,000 depreciation, $4,000 proceeds; (4)computer equipment, $35,000 cost basis, $16,000 depreciation, $15,000 proceeds; (5)Winchester had unrecaptured §1231 losses of $5,000 in the prior five years. What is the amount and character of Winchester's gains and losses before the 1231 netting process?

In the current year, Raven sold machinery with a fair market value of $200,000. The machinery's original basis was $190,500 and Raven's accumulated depreciation on the machinery was $40,400, so its adjusted basis to Raven was $150,100. Raven received $49,900 in the current year and a note paying Raven $75,050 a year for two years beginning next year. What is the amount and character of the gain that Raven will recognize in the current year?