Question 1

Which of the following sections recaptures or recharacterizes only corporate taxpayer's gains?

Accepted Answer

The answer of Which of the following sections recaptures or...

Question 2

Which of the following results in an ordinary gain or loss?

Accepted Answer

Sale of inventory results in an ordinary gain or loss.

Question 3

Which of the following is not a §1245 asset if held for more than one year?

Accepted Answer

Land is not a §1245 asset, regardless of how long it is held. §1245 assets include tangible personal property, such as machinery, automobiles, and computers, that have a depreciation recapture potential when the asset is sold or exchanged.

Question 4

Brad sold a rental house that he owned for $250,000. Brad bought the rental house five years ago for $225,000 and has claimed $50,000 of depreciation expense. What is the amount and character of Brad's gain or loss?

Accepted Answer

The answer of Brad sold a rental house that he...

Question 5

The sale of machinery for more than the original cost basis (before depreciation), used in a trade or business, and held for more than one year results in the following types of gain or loss?

Accepted Answer

The answer of The sale of machinery for more than...

Question 6

Butte sold a machine to a machine dealer for $50,000. Butte bought the machine for $55,000 several years ago and has claimed $12,500 of depreciation expense on the machine. What is the amount and character of Butte's gain or loss?

Accepted Answer

The answer of Butte sold a machine to a machine...

Question 7

Which of the following transactions results solely in §1245 gain?

Accepted Answer

The answer of Which of the following transactions results solely...

Question 8

Which of the following does not ultimately result in a capital gain or loss?

Accepted Answer

The answer of Which of the following does not ultimately...

Question 9

Foreaker LLC sold a piece of land that it uses in its business for $52,000. Foreaker bought the land two years ago for $42,500. What is the amount and character of Foreaker's gain?

Accepted Answer

The gain on the sale of the land is $9,500 ($52,000 - $42,500). The character of the gain is §1231, which applies to the sale of depreciable business property held for more than one year.

Question 10

The sale of land held for investment results in the following type of gain or loss?

Accepted Answer

The sale of land held for investment will result in a capital gain or loss. This is because the land is not a depreciable asset and is not held for sale in the ordinary course of business. As such, it is classified as a capital asset under the tax code.

Question 11

Which of the following is true regarding depreciation recapture?

Accepted Answer

Depreciation recapture changes the character of a gain from capital gain to ordinary income, which is taxed at a higher rate. It does not affect losses, the amount of gain, or only apply to ordinary assets.

Question 12

What is the character of land used in an active trade or business for two years?

Accepted Answer

The answer of What is the character of land used...

Question 13

Leesburg sold a machine for $2,200 on November 10^th of the current year. The machine was purchased for $2,600. Leesburg had taken $1,200 of depreciation deductions on the machine through the date of the sale. What is Leesburg's gain or loss realized on the machine?

Accepted Answer

The answer of Leesburg sold a machine for $2,200 on...

Question 14

Bozeman sold equipment that it uses in its business for $80,000. Bozeman bought the equipment two years ago for $75,000 and has claimed $20,000 of depreciation expense. What is the amount and character of Bozeman's gain or loss?

Accepted Answer

The answer of Bozeman sold equipment that it uses in...

Question 15

Which of the following gains does not result solely in an ordinary gain or loss?

Accepted Answer

The answer of Which of the following gains does not...

Question 16

Bateman Corporation sold an office building that it used in its business for $800,000. Bateman bought the building ten years ago for $600,000 and has claimed $200,000 of depreciation expense. What is the amount and character of Bateman's gain or loss?

Accepted Answer

The answer of Bateman Corporation sold an office building that...

Question 17

The sale of computer equipment used in a trade or business for 9 months results in the following type of gain or loss?

Accepted Answer

The answer of The sale of computer equipment used in...

Question 18

Which of the following sections does not recapture or recharacterize a taxpayer's gain?

Accepted Answer

The answer of Which of the following sections does not...

Question 19

The sale of machinery at a loss that was used in a trade or business and held for more than one year results in the following type of loss?

Accepted Answer

The sale of machinery used in a trade or business and held for more than one year results in a §1231 loss. This is a type of loss that is treated differently from other types of losses, as it is netted against any §1231 gains in the current tax year. If there is a net §1231 loss, it can be treated as an ordinary loss instead of a capital loss, which may provide a more favorable tax outcome.

Question 20

Sumner sold equipment that it uses in its business for $30,000. Sumner bought the equipment a few years ago for $80,000 and has claimed $40,000 of depreciation expense. Assuming that this is Sumner's only disposition during the year, what is the amount and character of Sumner's gain or loss?

Accepted Answer

The answer of Sumner sold equipment that it uses in...

Quiz 11: Property Dispositions

Which of the following sections recaptures or recharacterizes only corporate taxpayer's gains?

Which of the following results in an ordinary gain or loss?

Which of the following is not a §1245 asset if held for more than one year?

Brad sold a rental house that he owned for $250,000. Brad bought the rental house five years ago for $225,000 and has claimed $50,000 of depreciation expense. What is the amount and character of Brad's gain or loss?

The sale of machinery for more than the original cost basis (before depreciation) , used in a trade or business, and held for more than one year results in the following types of gain or loss?

Butte sold a machine to a machine dealer for $50,000. Butte bought the machine for $55,000 several years ago and has claimed $12,500 of depreciation expense on the machine. What is the amount and character of Butte's gain or loss?

Which of the following transactions results solely in §1245 gain?

Which of the following does not ultimately result in a capital gain or loss?

Foreaker LLC sold a piece of land that it uses in its business for $52,000. Foreaker bought the land two years ago for $42,500. What is the amount and character of Foreaker's gain?

The sale of land held for investment results in the following type of gain or loss?

Which of the following is true regarding depreciation recapture?

What is the character of land used in an active trade or business for two years?

Leesburg sold a machine for $2,200 on November 10^th of the current year. The machine was purchased for $2,600. Leesburg had taken $1,200 of depreciation deductions on the machine through the date of the sale. What is Leesburg's gain or loss realized on the machine?

Bozeman sold equipment that it uses in its business for $80,000. Bozeman bought the equipment two years ago for $75,000 and has claimed $20,000 of depreciation expense. What is the amount and character of Bozeman's gain or loss?

Which of the following gains does not result solely in an ordinary gain or loss?

Bateman Corporation sold an office building that it used in its business for $800,000. Bateman bought the building ten years ago for $600,000 and has claimed $200,000 of depreciation expense. What is the amount and character of Bateman's gain or loss?

The sale of computer equipment used in a trade or business for 9 months results in the following type of gain or loss?

Which of the following sections does not recapture or recharacterize a taxpayer's gain?

The sale of machinery at a loss that was used in a trade or business and held for more than one year results in the following type of loss?

Sumner sold equipment that it uses in its business for $30,000. Sumner bought the equipment a few years ago for $80,000 and has claimed $40,000 of depreciation expense. Assuming that this is Sumner's only disposition during the year, what is the amount and character of Sumner's gain or loss?

Quiz 11: Property Dispositions

Which of the following sections recaptures or recharacterizes only corporate taxpayer's gains?

Which of the following results in an ordinary gain or loss?

Which of the following is not a §1245 asset if held for more than one year?

Brad sold a rental house that he owned for $250,000. Brad bought the rental house five years ago for $225,000 and has claimed $50,000 of depreciation expense. What is the amount and character of Brad's gain or loss?

The sale of machinery for more than the original cost basis (before depreciation) , used in a trade or business, and held for more than one year results in the following types of gain or loss?

Butte sold a machine to a machine dealer for $50,000. Butte bought the machine for $55,000 several years ago and has claimed $12,500 of depreciation expense on the machine. What is the amount and character of Butte's gain or loss?

Which of the following transactions results solely in §1245 gain?

Which of the following does not ultimately result in a capital gain or loss?

Foreaker LLC sold a piece of land that it uses in its business for $52,000. Foreaker bought the land two years ago for $42,500. What is the amount and character of Foreaker's gain?

The sale of land held for investment results in the following type of gain or loss?

Which of the following is true regarding depreciation recapture?

What is the character of land used in an active trade or business for two years?

Leesburg sold a machine for $2,200 on November 10th of the current year. The machine was purchased for $2,600. Leesburg had taken $1,200 of depreciation deductions on the machine through the date of the sale. What is Leesburg's gain or loss realized on the machine?

Bozeman sold equipment that it uses in its business for $80,000. Bozeman bought the equipment two years ago for $75,000 and has claimed $20,000 of depreciation expense. What is the amount and character of Bozeman's gain or loss?

Which of the following gains does not result solely in an ordinary gain or loss?

Bateman Corporation sold an office building that it used in its business for $800,000. Bateman bought the building ten years ago for $600,000 and has claimed $200,000 of depreciation expense. What is the amount and character of Bateman's gain or loss?

The sale of computer equipment used in a trade or business for 9 months results in the following type of gain or loss?

Which of the following sections does not recapture or recharacterize a taxpayer's gain?

The sale of machinery at a loss that was used in a trade or business and held for more than one year results in the following type of loss?

Sumner sold equipment that it uses in its business for $30,000. Sumner bought the equipment a few years ago for $80,000 and has claimed $40,000 of depreciation expense. Assuming that this is Sumner's only disposition during the year, what is the amount and character of Sumner's gain or loss?

Leesburg sold a machine for $2,200 on November 10^th of the current year. The machine was purchased for $2,600. Leesburg had taken $1,200 of depreciation deductions on the machine through the date of the sale. What is Leesburg's gain or loss realized on the machine?