FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 7: Property Dispositions

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 21

Multiple Choice

Review LaterAdd Note

Review Later

Vero Corporation owns $200,000 of equipment used for its business and the building that the business is located in that is valued at $175,000.The business is successful and has investments in marketable securities valued at $45,000.What is the value of its capital assets?

A) $45,000
B) $75,000
C) $275,000
D) $320,000

E) B) and C)
F) A) and B)

Correct Answer

verified

Show Answer

Question 22

Multiple Choice

Review LaterAdd Note

Review Later

Which of the following is correct?

A) The Section 1231 lookback rule converts potential long-term capital gain into ordinary income.
B) The Section 1231 lookback rule converts ordinary gain into ordinary loss.
C) The Section 1231 lookback rule converts casualty gain into long-term capital gain.
D) The Section 1231 lookback rule applies only to realty.

E) C) and D)
F) B) and D)

Correct Answer

verified

Show Answer

Question 23

True/False

Review LaterAdd Note

_____ 16.A taxpayer who disposes of his or her home in a short sale must recognize up to $1 million in cancellation of indebtedness income.

_____ 3.The holding period for a long-term capital asset is only one year for tax-favored treatment.

Martone Corporation sells two machines and a warehouse it has been using for storage in the current tax year.Each of the machines cost $25,000 and has an adjusted basis of $11,000 when each was sold for $14,000.The warehouse cost $105,000,has an adjusted basis of $60,000 and is sold for $95,000.All assets were depreciated using MACRS depreciation.What is the amount and type of gain recognized by Martone on the sale of these assets?

Alpha Corporation had income from operations of $30,000.What is the corporation's taxable income including the following property transactions: Gain on investment stock = $8,000;loss on machinery held three years = $6,000;$4,000 loss on equipment held 10 months;$4,000 gain on land used for six years for storage of trucks.

Marvin sold his sister,Sue,some stock for $20,000 that he had purchased two years ago for $25,000.Nine months later,Sue sold the stock for $27,000.How much gain does Sue recognize on the sale?

Wesley sold a piece of property for $30,000 cash paying a $3,000 sales commission.The buyer assumed Wesley's $13,000 mortgage on the property.Wesley had purchased the property for $15,000 and had invested an additional $6,000 in it.What is Wesley's realized gain on the sale?

Shawn,a single taxpayer,sold the house he has lived in for seven years for $700,000.He purchased the house for $285,000.He made improvements at a cost of $125,000 and paid a $30,000 commission on the sale.What are Shawn's realized and recognized gains on the sale?

Becky bought a home with her husband,Ken,in 1999 for $125,000.They were divorced in 2008 and Becky became sole owner of the home under the divorce decree.On January 5,2012,Becky married Michael.Michael and Becky have been living in the house since their marriage but they are planning now to move.If Michael and Becky sell their home on December 15,2013 for $500,000,how much taxable gain must they report on their 2013 joint tax return?

Melody works in her home.She purchased a computer two years ago for $2,500.The total adjusted basis for the computer is now $1,000.Her husband and children used the computer 20 percent of the time to play computer games and for personal correspondence.She sells the computer for $1,200.How much and what kind of gain does Melody recognize?

Kelly,a single individual,has $15,000 of taxable income before a long-term capital gain of $5,000 on the sale of some stock owned for two years that she sold in 2013.What is the tax rate applied to this gain?

Tina is single and one of the founding shareholders of Exacta Corporation.She acquired her Exacta Section 1244 stock four years ago for $123,000.During the current year,Tina sold all of her Exacta stock to an unrelated party for $40,000.Tina had no other capital gains or losses during the year.What is the maximum amount of loss Tina can deduct in the current year for the Exacta stock?

William purchased his personal residence in 2007 for $285,000.In 2012,he lost his job and has been unable to make payments on the mortgage since July of 2012.In 2013,William works out a new repayment schedule with his bank after he obtained a new job that reduces his mortgage from $235,000 to $120,000.Which of the following statements is true regarding this mortgage reduction?

_____ 15.Corporate net capital gains receive no tax-favored treatment.

_____ 14.Individuals can only deduct capital losses to the extent of prior capital gains plus $5,000.

Coley Corporation has an $800 net short-term capital loss and a $6,000 net long-term capital gain in the current year.It also has an $8,000 long-term capital loss carryover from the prior year.What is Coley's capital loss carryover to the next year?

Abby has a $10,000 loss on some collectibles,a $5,000 Sec.1202 gain,and an $11,000 gain on some securities.If all gains and losses are long-term and Abby is in the 25 percent tax bracket,how is her net gain taxed?

Carol used her auto 60 percent for business and 40 percent for personal use.She purchased it for $10,800 and has taken $3,992 of depreciation on it.What is her recognized gain on a sale for $7,800 and what is it character?

Which of the following comparisons is correct?