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Exam 10: Property Dispositions

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Question 61

Multiple Choice

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Which one of the following is not true regarding a like-kind exchange?

A) Loss on like-kind property is not recognized.
B) Gains on boot given are deferred.
C) Losses on boot given are not recognized.
D) Securities can be like-kind with any other securities.
E) All of these.

F) C) and D)
G) A) and B)

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Question 62

Multiple Choice

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When does unrecaptured §1250 gains apply?

A) When the taxpayer makes the election.
B) It applies only when non-corporate taxpayers sell depreciable real property at a gain.
C) It applies when §1245 recapture trumps §1250 recapture.
D) It applies only when real property purchased before 1986 is sold at a gain.
E) None of these.

F) C) and D)
G) A) and B)

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Question 63

True/False

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The gain or loss realized is the amount realized less the adjusted basis.

The gain or loss realized is always recognized for tax purposes.

Which one of the following is not considered boot in a like-kind exchange?

Manassas purchased a computer several years ago for $2,200. On November 10th of the current year, the computer was worth $800. If $1,000 of depreciation deductions had been taken, what is Manassas' tax adjusted basis for the computer?

Redoubt LLC traded machinery used in its business to a machinery dealer for some new machinery. Redoubt originally purchased the machinery for $80,000 and it had an adjusted basis of $53,000 at the time of the exchange. The new machinery had a fair market value of $62,000. Redoubt also received $7,000 of computer equipment in the transaction. What is Redoubt's gain or loss recognized on the exchange?

Which of the following is true regarding disallowed losses between related taxpayers?

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

A parcel of land is always a capital asset.