Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

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 these qualify for installment sale treatment.F) A) and D)
G) A) and C)

Question 3

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

Accepted Answer

A)   $3,000 ordinary loss, $0 §1231 loss.
B)   $7,000 ordinary gain, $10,000 §1231 loss.
C)   $7,000 ordinary loss, $4,000 §1231 gain.
D)   $1,000 ordinary gain, $4,000 §1231 loss.
E)   None of these.F) All of the above
G) C) and E)

Question 4

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?

Accepted Answer

$25,000 ordinary gain, and $10,000 §1231...

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

§1250 recaptures the excess of accelerated depreciation over straight line depreciation on real property placed in service between 1981 and 1986 as ordinary income.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

Which of the following results in an ordinary gain or loss?

Accepted Answer

A)   Sale of a machine at a gain.
B)   Sale of stock held for investment.
C)   Sale of a §1231 asset.
D)   Sale of inventory.
E)   None of these.F) None of the above
G) C) and D)

Question 9

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

Accepted Answer

A)   The like-kind property to be received must be identified within 45 days.
B)   The like-kind property to be received must be identified by the earlier of 45 days or the last day of the taxpayer's taxable year.
C)   The like-kind property to be received must be identified within 180 days.
D)   There is no deadline for the identification of replacement property.
E)   All of these.F) None of the above
G) A) and B)

Question 10

§1231 assets include all assets used in a trade or business.

Accepted Answer

A) True 
 B)False

Exam 11: Property Dispositions

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?

Correct Answer
verified
$25,000 ordinary gain, and $10,000 §1231...
View Answer

§1231 assets include all assets used in a trade or business.

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

§1250 recaptures the excess of accelerated depreciation over straight line depreciation on real property placed in service between 1981 and 1986 as ordinary income.

Correct Answer
verified

Correct Answer
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Which of the following results in an ordinary gain or loss?

Correct Answer
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Which of the following may qualify as an installment sale?

Correct Answer
verified

Exam 11: Property Dispositions

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?

Correct Answerverified$25,000 ordinary gain, and $10,000 §1231...View AnswerShow Answer

§1231 assets include all assets used in a trade or business.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

§1250 recaptures the excess of accelerated depreciation over straight line depreciation on real property placed in service between 1981 and 1986 as ordinary income.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following results in an ordinary gain or loss?

Correct AnswerverifiedShow Answer

Which of the following may qualify as an installment sale?

Correct AnswerverifiedShow Answer

Correct Answer
verified
$25,000 ordinary gain, and $10,000 §1231...
View Answer

Correct Answer
verified

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Correct Answer
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