FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 7: Property Transactions: Basis, gain and Loss, and Nontaxable Exchange

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 51

Essay

Review LaterAdd Note

Review Later

Discuss the application of holding period rules to property acquired by gift and inheritance.

Correct Answer

verified

The holding period for inherited propert...

View Answer

Show Answer

Question 52

Multiple Choice

Review LaterAdd Note

Review Later

Which of the following statements is correct with respect to § 1044 (rollover of publicly traded securities gain into specialized small business investment companies) ?

A) Section 1044 provides for permanent exclusion of gain.
B) To qualify under § 1044,the proceeds must be reinvested within one year of the sale.
C) The statutory ceilings on § 1044 treatment are the same for individual and corporate taxpayers.
D) Only b.and c.are correct.
E) None of the above.

F) D) and E)
G) All of the above

Correct Answer

verified

Show Answer

Question 53

True/False

Review LaterAdd Note

If the recognized gain on an involuntary conversion equals the realized gain because of a reinvestment deficiency,the basis of the replacement property will be more than its cost (cost plus realized gain).

What is the easiest way for a taxpayer who is going to sell property that has declined in value to avoid the § 267 loss disallowance provision?

Abby sells real property for $300,000.The buyer pays $5,000 in property taxes that had accrued during the year while the property was still legally owned by Abby.In addition,Abby pays $15,000 in commissions and $3,000 in legal fees in connection with the sale.How much does Abby realize (the amount realized) from the sale of her property?

Maud exchanges a rental house at the beach with an adjusted basis of $225,000 and a fair market value of $200,000 for a rental house at the mountains with a fair market value of $180,000 and cash of $20,000.What is the recognized gain or loss?

Discuss the logic for mandatory deferral of realized gain or loss for a § 1031 like-kind exchange.

Define a bargain purchase of property and discuss the related tax consequences.

Alice owns land with an adjusted basis of $610,000,subject to a mortgage of $350,000.Real estate taxes are $9,000 per calendar year and are payable on December 31.On April 1,2013,Alice sells her land subject to the mortgage for $650,000 in cash,a note for $600,000,and property with a fair market value of $120,000.What is the amount realized?

The holding period for nontaxable stock dividends that are the same type (i.e.,common on common)includes the holding period of the original shares,but the holding period for nontaxable stock dividends that are not the same type (i.e.,preferred on common)is new and begins on the date the dividend is received.

Robert sold his ranch which was his principal residence during the current taxable year.At the date of the sale,the ranch had an adjusted basis of $460,000 and was encumbered by a mortgage of $200,000.The buyer paid him $500,000 in cash,agreed to take the title subject to the $200,000 mortgage,and agreed to pay him $100,000 with interest at 6 percent one year from the date of sale.How much is Robert's recognized gain on the sale?

Livestock of different sexes can qualify for like-kind exchange treatment if the livestock has been held for over 24 months.

The basis for depreciation on depreciable gift property received is the donor's adjusted basis of the property at the date of the gift (assuming no gift taxes are paid).The rule applies regardless of whether the fair market value at the date of the gift is greater than or less than the donor's adjusted basis.

A realized gain on the sale or exchange of a personal use asset is recognized,but a realized loss on the sale,exchange,or condemnation of a personal use asset is not recognized.

Realized gain or loss is measured by the difference between the amount realized from the sale or other disposition of property and the property's adjusted basis at the date of disposition.

Karen purchased 100 shares of Gold Corporation stock for $11,500 on January 1,2010.In the current tax year (2013) ,she sells 25 shares of the 100 shares purchased on January 1,2010,for $2,500.Twenty-five days earlier,she had purchased 30 shares for $3,000.What is Karen's recognized gain or loss on the sale of the stock,and what is her basis in the 30 shares purchased 25 days earlier?

Ross lives in a house he received as a gift from his father.His father had lived in the house for 12 years.The adjusted basis of the house to his father was $160,000 and the fair market value at the time of the gift was $140,000.Ross sells this residence after living in it for 18 months for $150,000 and purchases a new home for $125,000.He incurs selling expenses of $7,000.What is Ross' recognized gain or loss and basis for the new residence?

Elbert gives stock worth $28,000 (no gift tax resulted)to his friend,Jeff,on June 8,2013.Elbert purchased the stock on September 1,2006,and his adjusted basis is $22,000.Jeff dies on December 8,2014,and bequeaths the stock to Elbert.At that date,the fair market value of the stock is $31,000. a. What is Jeff s basis and holding period for the stock? b. What is Elbert's basis and holding period for the stock?

If a taxpayer purchases a business and the price exceeds the fair market value of the listed assets,how is the excess allocated among the purchased assets?

If Wal-Mart stock increases in value during the tax year by $6,000,the amount realized is a positive $6,000.