Question 1

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) All of the above
G) C) and D)

Question 2

Which of the following is not true regarding installment sales?

Accepted Answer

A)  Only gains are eligible for installment sale reporting.
B)  Depreciation recapture is deferred in an installment sale.
C)  The gross profit percentage is needed to determine the annual gain recognized.
D)  Stock sales are ineligible for installment sale treatment.
E)  None of the choices are correct.F) A) and E)
G) None of the above

Question 3

Leesburg sold a machine for $2,200 on November 10th of the current year. The machine was purchased for $2,600. Leesburg had taken $1,200 of depreciation deductions on the machine through the date of the sale. What is Leesburg's gain or loss realized on the machine?

Accepted Answer

A)  $800 gain.
B)  $1,000 gain.
C)  $1,200 loss.
D)  $1,400 loss.
E)  None of the choices are correct.F) A) and E)
G) C) and D)

Question 4

Foreaker LLC sold a piece of land that it uses in its business for $52,000. Foreaker bought the land two years ago for $42,500. What is the amount and character of Foreaker's gain?

Accepted Answer

A)  $9,500 §1221.
B)  $9,500 §1231.
C)  $9,500 §1245.
D)  $9,500 §1250.
E)  None of the choices are correct.F) A) and C)
G) All of the above

Question 5

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

Accepted Answer

A)  Farmland traded for an office building.
B)  Sale to a related party.
C)  Involuntary conversion.
D)  Iowa cropland exchanged for a Minnesota warehouse.E) B) and D)
F) None of the above

Question 6

The sale of computer equipment used in a trade or business for nine months results in which of the following types of gain or loss?

Accepted Answer

A)  Capital.
B)  Ordinary.
C)  §1231.
D)  §1245.
E)  None of the choices are correct.F) B) and D)
G) A) and B)

Question 7

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

Accepted Answer

A)  The like-kind property to be received must be identified within 45 days.
B)  The exchange must be completed within the taxable year.
C)  The like-kind property must be received within 180 days.
D)  The exchanged property must be like-kind.
E)  All of the choices are correct.F) D) and E)
G) All of the above

Question 8

Taxpayers can recognize a taxable gain on the sale of an asset even though an asset's real economic value has declined.

Accepted Answer

A) True 
 B)False

Question 9

The amount realized is the sale proceeds less the adjusted basis.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following transactions results solely in §1245 gain?

Accepted Answer

A)  Sale of machinery held for less than one year.
B)  Sale of machinery held for more than one year, where the gain realized exceeds the accumulated depreciation.
C)  Sale of machinery held for more than one year, where the accumulated depreciation exceeds the gain realized.
D)  Sale of land held for more than one year, where the amount realized exceeds the adjusted basis.
E)  None of the choices are correct.F) B) and C)
G) C) and E)

Exam 11: Property Dispositions

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

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

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

Correct Answer
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The amount realized is the sale proceeds less the adjusted basis.

Correct Answer
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Which of the following is not true regarding installment sales?

Correct Answer
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The sale of computer equipment used in a trade or business for nine months results in which of the following types of gain or loss?

Correct Answer
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Leesburg sold a machine for $2,200 on November 10^th of the current year. The machine was purchased for $2,600. Leesburg had taken $1,200 of depreciation deductions on the machine through the date of the sale. What is Leesburg's gain or loss realized on the machine?

Correct Answer
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Foreaker LLC sold a piece of land that it uses in its business for $52,000. Foreaker bought the land two years ago for $42,500. What is the amount and character of Foreaker's gain?

Correct Answer
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Taxpayers can recognize a taxable gain on the sale of an asset even though an asset's real economic value has declined.

Correct Answer
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Which of the following transactions results solely in §1245 gain?

Correct Answer
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Exam 11: Property Dispositions

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The amount realized is the sale proceeds less the adjusted basis.

Correct AnswerverifiedShow Answer

Which of the following is not true regarding installment sales?

Correct AnswerverifiedShow Answer

The sale of computer equipment used in a trade or business for nine months results in which of the following types of gain or loss?

Correct AnswerverifiedShow Answer

Leesburg sold a machine for $2,200 on November 10th of the current year. The machine was purchased for $2,600. Leesburg had taken $1,200 of depreciation deductions on the machine through the date of the sale. What is Leesburg's gain or loss realized on the machine?

Correct AnswerverifiedShow Answer

Foreaker LLC sold a piece of land that it uses in its business for $52,000. Foreaker bought the land two years ago for $42,500. What is the amount and character of Foreaker's gain?

Correct AnswerverifiedShow Answer

Taxpayers can recognize a taxable gain on the sale of an asset even though an asset's real economic value has declined.

Correct AnswerverifiedShow Answer

Which of the following transactions results solely in §1245 gain?

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Leesburg sold a machine for $2,200 on November 10^th of the current year. The machine was purchased for $2,600. Leesburg had taken $1,200 of depreciation deductions on the machine through the date of the sale. What is Leesburg's gain or loss realized on the machine?

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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