Question 1

The amount realized equals the gross selling price less any selling expenses.

Accepted Answer

This statement is true. The amount realized is the net amount received by the seller after deducting any selling expenses from the gross selling price.

Question 2

Classify the gain or loss on each of George's assets listed below using the following codes. Note: a code may be used once, more than once, or not at all.
-George regularly invests unneeded business cash in Eli Lilly common stock.He has bought 200 shares of stock on May 1 of each year from 1983 through 2009.Because of an urgent need for cash,he sells 100 shares of the stock at an $850 gain on March 28,2013.Because the stock is held in a brokerage account,he did not have any paper shares of stock to surrender.He merely told his broker to sell 100 shares.
A)Long-term capital
B)Short-term capital
C)Collectible gain
D)Section 1231
E)Section 1245
F)Section 1250
G)Ordinary income/loss
H)Nontaxable/nondeductible

Accepted Answer

The gain on the sale of the Eli Lilly stock is a long-term capital gain because the stock was held for more than one year before it was sold. None of the other codes apply in this case.

Question 3

Classify the gain or loss on each of George's assets listed below using the following codes. Note: a code may be used once, more than once, or not at all.
-George sells land purchased in 1989 that he used to park construction equipment at a gain of $16,500.
A)Long-term capital
B)Short-term capital
C)Collectible gain
D)Section 1231
E)Section 1245
F)Section 1250
G)Ordinary income/loss
H)Nontaxable/nondeductible

Accepted Answer

D

Question 4

Match each statement with the correct term below.
-Section 1231 property
A)Stocks, bonds, options.
B)Depreciable real property.
C)Taxed at an effective rate of 14%.
D)Taxed at a maximum rate of 25%.
E)Gain or loss on the sale of artwork.
F)Depreciable tangible personal property.
G)Subject to full recapture as ordinary income of all depreciation taken.
H)Gain on real property attributable to excess depreciation is ordinary income.

Accepted Answer

The answer of Match each statement with the correct term...

Question 5

Classify the gain or loss on each of George's assets listed below using the following codes. Note: a code may be used once, more than once, or not at all.
-George sells his personal use automobile at a loss of $4,300.
A)Long-term capital
B)Short-term capital
C)Collectible gain
D)Section 1231
E)Section 1245
F)Section 1250
G)Ordinary income/loss
H)Nontaxable/nondeductible

Accepted Answer

The loss on the sale of a personal use automobile is considered a nondeductible personal loss, hence it does not qualify for capital loss treatment or any other specific tax treatment listed.

Question 6

A buyer's assumption of the seller's debt increases the gross sales price and any debt of the buyer assumed by the seller in the transaction also increases the gross sales price.

Accepted Answer

The answer of A buyer's assumption of the seller's debt...

Question 7

Classify the gain or loss on each of George's assets listed below using the following codes. Note: a code may be used once, more than once, or not at all.
-On December 1,2011,George paid $17,500 for a painting.On October 31,2013,he sells the painting for $26,750.
A)Long-term capital
B)Short-term capital
C)Collectible gain
D)Section 1231
E)Section 1245
F)Section 1250
G)Ordinary income/loss
H)Nontaxable/nondeductible

Accepted Answer

The answer of Classify the gain or loss on each...

Question 8

Match each statement with the correct term below.
-Collectible gain (loss)
A)Stocks, bonds, options.
B)Depreciable real property.
C)Taxed at an effective rate of 14%.
D)Taxed at a maximum rate of 25%.
E)Gain or loss on the sale of artwork.
F)Depreciable tangible personal property.
G)Subject to full recapture as ordinary income of all depreciation taken.
H)Gain on real property attributable to excess depreciation is ordinary income.

Accepted Answer

Collectible gain (loss) refers to the gain or loss on the sale of items considered collectibles, such as artwork, which are taxed differently from regular income or investment gains.

Question 9

Allie,a well-known artist,gave one of her paintings to her nephew Alfred.When Alfred sells the painting he will have a capital gain.

Accepted Answer

The answer of Allie,a well-known artist,gave one of her paintings...

Question 10

Gains on the sale of certain types of business assets,referred to as Section 1231 property,are always treated as capital gains.

Accepted Answer

Section 1231 gains can be treated as either capital gains or ordinary income depending on whether the aggregate of all Section 1231 gains and losses results in a net gain or loss for the tax year.

Question 11

Classify the gain or loss on each of George's assets listed below using the following codes. Note: a code may be used once, more than once, or not at all.
-George sells a fully depreciated air compressor that cost $975 for $650.The compressor was used to operate air tools.
A)Long-term capital
B)Short-term capital
C)Collectible gain
D)Section 1231
E)Section 1245
F)Section 1250
G)Ordinary income/loss
H)Nontaxable/nondeductible

Accepted Answer

The gain on the sale of a fully depreciated asset used in a business, like an air compressor for operating air tools, is classified as Section 1245 gain. This section recaptures depreciation as ordinary income up to the amount of the gain realized on the sale.

Question 12

Match each statement with the correct term below.
-Section 1245 property
A)Stocks, bonds, options.
B)Depreciable real property.
C)Taxed at an effective rate of 14%.
D)Taxed at a maximum rate of 25%.
E)Gain or loss on the sale of artwork.
F)Depreciable tangible personal property.
G)Subject to full recapture as ordinary income of all depreciation taken.
H)Gain on real property attributable to excess depreciation is ordinary income.

Accepted Answer

The answer of Match each statement with the correct term...

Question 13

Match each statement with the correct term below.
-Capital Asset
A)Stocks, bonds, options.
B)Depreciable real property.
C)Taxed at an effective rate of 14%.
D)Taxed at a maximum rate of 25%.
E)Gain or loss on the sale of artwork.
F)Depreciable tangible personal property.
G)Subject to full recapture as ordinary income of all depreciation taken.
H)Gain on real property attributable to excess depreciation is ordinary income.

Accepted Answer

The answer of Match each statement with the correct term...

Question 14

Match each statement with the correct term below.
-Section 1250 recapture
A)Stocks, bonds, options.
B)Depreciable real property.
C)Taxed at an effective rate of 14%.
D)Taxed at a maximum rate of 25%.
E)Gain or loss on the sale of artwork.
F)Depreciable tangible personal property.
G)Subject to full recapture as ordinary income of all depreciation taken.
H)Gain on real property attributable to excess depreciation is ordinary income.

Accepted Answer

The answer of Match each statement with the correct term...

Question 15

Match each statement with the correct term below.
-Qualified Small Business stock gain
A)Stocks, bonds, options.
B)Depreciable real property.
C)Taxed at an effective rate of 14%.
D)Taxed at a maximum rate of 25%.
E)Gain or loss on the sale of artwork.
F)Depreciable tangible personal property.
G)Subject to full recapture as ordinary income of all depreciation taken.
H)Gain on real property attributable to excess depreciation is ordinary income.

Accepted Answer

Qualified Small Business Stock (QSBS) gain refers to a tax benefit where all or part of the gain from the sale of certain small business stock is excluded from federal income tax under Section 1202 of the Internal Revenue Code.

Question 16

Classify the gain or loss on each of George's assets listed below using the following codes. Note: a code may be used once, more than once, or not at all.
-George's construction company completed 5 homes during February 2012.He sells one of the homes in March 2013 at a $37,000 gain.
A)Long-term capital
B)Short-term capital
C)Collectible gain
D)Section 1231
E)Section 1245
F)Section 1250
G)Ordinary income/loss
H)Nontaxable/nondeductible

Accepted Answer

The answer of Classify the gain or loss on each...

Question 17

Match each statement with the correct term below.
-Section 1250 property
A)Stocks, bonds, options.
B)Depreciable real property.
C)Taxed at an effective rate of 14%.
D)Taxed at a maximum rate of 25%.
E)Gain or loss on the sale of artwork.
F)Depreciable tangible personal property.
G)Subject to full recapture as ordinary income of all depreciation taken.
H)Gain on real property attributable to excess depreciation is ordinary income.

Accepted Answer

The answer of Match each statement with the correct term...

Question 18

Classify the gain or loss on each of George's assets listed below using the following codes. Note: a code may be used once, more than once, or not at all.
-After using a house as his personal home for 20 years,George converts it in 2006 to an office building for use in his construction business.He sells the building at a $65,000 loss in 2013.
A)Long-term capital
B)Short-term capital
C)Collectible gain
D)Section 1231
E)Section 1245
F)Section 1250
G)Ordinary income/loss
H)Nontaxable/nondeductible

Accepted Answer

The loss on the sale of the building is classified as a Section 1231 loss because it was used in a trade or business and held for more than one year.

Question 19

Classify the gain or loss on each of George's assets listed below using the following codes. Note: a code may be used once, more than once, or not at all.
-George's wife sells stock she purchased 10 months ago at a gain of $212.
A)Long-term capital
B)Short-term capital
C)Collectible gain
D)Section 1231
E)Section 1245
F)Section 1250
G)Ordinary income/loss
H)Nontaxable/nondeductible

Accepted Answer

The stock was held for less than one year, so it is considered short-term and any gain is a short-term capital gain.

Question 20

Match each statement with the correct term below.
-Unrecaptured Section 1250 gain
A)Stocks, bonds, options.
B)Depreciable real property.
C)Taxed at an effective rate of 14%.
D)Taxed at a maximum rate of 25%.
E)Gain or loss on the sale of artwork.
F)Depreciable tangible personal property.
G)Subject to full recapture as ordinary income of all depreciation taken.
H)Gain on real property attributable to excess depreciation is ordinary income.

Accepted Answer

The answer of Match each statement with the correct term...

Quiz 11: Property Dispositions

The amount realized equals the gross selling price less any selling expenses.

Classify the gain or loss on each of George's assets listed below using the following codes. Note: a code may be used once, more than once, or not at all. -George sells land purchased in 1989 that he used to park construction equipment at a gain of $16,500.

Match each statement with the correct term below. -Section 1231 property

Classify the gain or loss on each of George's assets listed below using the following codes. Note: a code may be used once, more than once, or not at all. -George sells his personal use automobile at a loss of $4,300.

A buyer's assumption of the seller's debt increases the gross sales price and any debt of the buyer assumed by the seller in the transaction also increases the gross sales price.

Classify the gain or loss on each of George's assets listed below using the following codes. Note: a code may be used once, more than once, or not at all. -On December 1,2011,George paid $17,500 for a painting.On October 31,2013,he sells the painting for $26,750.

Match each statement with the correct term below. -Collectible gain (loss)

Allie,a well-known artist,gave one of her paintings to her nephew Alfred.When Alfred sells the painting he will have a capital gain.

Gains on the sale of certain types of business assets,referred to as Section 1231 property,are always treated as capital gains.

Classify the gain or loss on each of George's assets listed below using the following codes. Note: a code may be used once, more than once, or not at all. -George sells a fully depreciated air compressor that cost $975 for $650.The compressor was used to operate air tools.

Match each statement with the correct term below. -Section 1245 property

Match each statement with the correct term below. -Capital Asset

Match each statement with the correct term below. -Section 1250 recapture

Match each statement with the correct term below. -Qualified Small Business stock gain

Classify the gain or loss on each of George's assets listed below using the following codes. Note: a code may be used once, more than once, or not at all. -George's construction company completed 5 homes during February 2012.He sells one of the homes in March 2013 at a $37,000 gain.

Match each statement with the correct term below. -Section 1250 property

Classify the gain or loss on each of George's assets listed below using the following codes. Note: a code may be used once, more than once, or not at all. -George's wife sells stock she purchased 10 months ago at a gain of $212.

Match each statement with the correct term below. -Unrecaptured Section 1250 gain