Services
Discover
Homeschooling
Ask a Question
Log in
Sign up
Filters
Done
Question type:
Essay
Multiple Choice
Short Answer
True False
Matching
Topic
Business
Study Set
Federal Taxation
Quiz 7: Property Transactions: Basis, Gain and Loss, and Nontaxable Exchanges
Path 4
Access For Free
Share
All types
Filters
Study Flashcards
Practice Exam
Learn
Question 61
True/False
The basis of boot received in a like-kind exchange is its fair market value unless the realized gain is a smaller amount.
Question 62
True/False
If boot is received in a § 1031 like-kind exchange that results in some of the realized gain being recognized, the holding period for both the like-kind property and the boot received begins on the date of the exchange.
Question 63
True/False
If a taxpayer exchanges like-kind property and assumes a liability associated with the property received, the taxpayer is considered to have received boot in the transaction.
Question 64
True/False
The taxpayer must elect to have the exclusion of gain under § 121 (sale of principal residence) apply.
Question 65
True/False
Cole exchanges an asset (adjusted basis of $15,000; fair market value of $25,000) for another asset (fair market value of $19,000).In addition, he receives cash of $6,000.If the exchange qualifies as a like-kind exchange, his recognized gain is $6,000, and his adjusted basis for the property received is $21,000 ($15,000 + $6,000 recognized gain).
Question 66
True/False
Kendra owns a home in Atlanta.Her company transfers her to Chicago on January 2, 2019, and she sells the Atlanta house in early February 2019.She purchases a residence in Chicago on February 3, 2019.On December 15, 2019, Kendra's company transfers her to Los Angeles.In January 2020, she sells the Chicago residence and purchases a residence in Los Angeles.Because multiple sales have occurred within a two-year period, § 121 treatment does not apply to the sale of the second home.
Question 67
True/False
Bria's office building (basis of $225,000 and fair market value $275,000) is destroyed by a hurricane.Due to a 30% co-insurance clause, Bria receives insurance proceeds of $192,500 two months after the date of the loss.One month later, Bria uses the insurance proceeds to purchase a new office building for $275,000.Her adjusted basis for the new building is $307,500 ($275,000 cost + $32,500 postponed loss).
Question 68
True/False
Wyatt sells his principal residence in December 2019 and qualifies for the § 121 exclusion.He sells another principal residence in November 2020.Under no circumstance can Wyatt qualify for the § 121 exclusion on the sale of the second residence.
Question 69
True/False
The amount realized does not include any amount received by the taxpayer that is designated as severance damages by both the government and the taxpayer.
Question 70
True/False
Section 1033 (nonrecognition of gain from an involuntary conversion) applies to both gains and losses.
Question 71
True/False
To qualify for the § 121 exclusion, the property must have been used by the taxpayer for the five years preceding the date of sale and owned by the taxpayer as the principal residence for the last two of those years.
Question 72
True/False
Milt's building, which houses his retail sporting goods store, is destroyed by a flood.Sandra's warehouse, which she is leasing to Milt to store the inventory of his business, also is destroyed in the same flood.Both Milt and Sandra receive insurance proceeds that result in a realized gain.Sandra will have less flexibility than Milt in the type of building in which she can invest the proceeds and qualify for postponement treatment under § 1033 (nonrecognition of gain from an involuntary conversion).
Question 73
True/False
Terry exchanges real estate (acquired on August 25, 2013) held for investment for other real estate to be held for investment on September 1, 2019.None of the realized gain of $10,000 is recognized, and Terry's adjusted basis for the new real estate is a carryover basis of $80,000.Consequently, Terry's holding period for the new real estate begins on August 25, 2013.
Question 74
True/False
If a taxpayer reinvests the net proceeds (amount received minus related expenses) received in an involuntary conversion in qualifying replacement property within the statutory time period, it is possible to defer the recognition of the realized gain.
Question 75
True/False
If an election to postpone gain under § 1033 is made, the holding period of replacement property includes the holding period of the involuntarily converted property.
Question 76
True/False
An involuntary conversion results from the destruction (complete or partial), theft, seizure, requisition or condemnation, or the sale or exchange under threat or imminence of requisition or condemnation of the taxpayer's property.
Question 77
True/False
The surrender of depreciated boot (fair market value is less than adjusted basis) in a like-kind exchange can result in the recognition of loss.
Question 78
True/False
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).
Question 79
True/False
A taxpayer who sells his or her principal residence at a realized loss can elect to recognize the loss even if a qualified residence is acquired during the statutory time period.