Question 1

For disallowed losses on related-party transactions, who has the right of offset?

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Question 2

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

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Question 3

Discuss the relationship between realized gain and boot received in a § 1031 like-kind exchange.

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Question 4

Discuss the relationship between the postponement of realized gain under § 1031 (like-kind exchanges) and the adjusted basis and holding period for the replacement property.

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Question 5

Under what circumstance is there recognition of some or all of the realized gain associated with the giving of boot by the taxpayer in a like-kind exchange?

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Question 6

Discuss the treatment of losses from involuntary conversions.

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Question 7

What effect do the assumption of liabilities have on a § 1031 like-kind exchange?

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Question 8

What kinds of property do not qualify under the like-kind provisions?

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Question 9

Why is it generally undesirable to pass property by death when its fair market value is less than basis?

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Question 10

Alice is terminally ill and does not expect to live much longer.Pondering the consequences of her estate, she decides how to allocate her property to her nieces.She makes a gift of depreciated property (i.e., adjusted basis exceeds fair market value) to Marsha, a gift of appreciated property (i.e., fair market value exceeds adjusted basis) to Jan, and leaves appreciated property to Cindy in her will.Each of the properties has the same fair market value.From an income tax perspective, which niece is her favorite?

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Question 11

Define an involuntary conversion.

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Question 12

Tariq sold certain U.S.Government bonds and State of Oregon bonds at a loss to offset short-term capital gain from a previous transaction.He felt that the U.S.Government and State of Oregon bonds were "good" investments, so he repurchased identical securities within one week.Do these transactions constitute wash sales?

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Question 13

What requirements must be satisfied to receive nontaxable exchange treatment under § 1031?

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Question 14

Discuss the treatment of realized gains from involuntary conversions.

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Question 15

Identify two tax planning techniques that can be used to avoid the wash sale disallowance of loss.

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Question 16

To be eligible to elect postponement of gain treatment for an involuntary conversion, what are the three tests for qualifying replacement property?

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Question 17

Explain how the sale of investment property at a loss to a brother is treated differently from a sale to a nephew.

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Question 18

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?

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Question 19

Mitchell owned an SUV that he had purchased two years ago for $48,000 and which he transfers to his sole proprietorship.How is the sole proprietorship's basis for the SUV calculated? What additional information does Mitchell need?

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Question 20

Can related parties take advantage of the like-kind exchange provisions?

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Quiz 13: Property Transactions: Determination of Gain or Loss, Basis Considerations, and Nontaxable Exchanges-Part 2