Question 1
Which of the following is true of a like-kind exchange: Select one:
a. There must be no cash exchanged to qualify. b. The properties exchanged cannot be personal residences. c. Office furniture can be exchanged for computers. d. A new holding period for capital gains treatment starts on the day the exchange is completed.
Question 2
Simonne, a single taxpayer, bought her home in La Jolla 25 years ago for $55,000. She has lived continuously in the home since she purchased it. In the current year, she sells her home for $405,000. What is Simonne's taxable gain on the sale? Select one:
a. $0 b. $90,000 c. $100,000 d. $350,000
Question 3
Sol purchased land as an investment on February 12, 2014 for $85,000. On January 31, 2015, Sol sold the land for $90,000 cash. What is the nature of the gain or loss? Select one:
a. Long-term capital loss b. Long-term capital gain c. Short-term capital gain d. Short-term capital loss e. None of the above
Question 4
Which one of the following is a capital asset? Select one:
a. Accounts receivable b. Copyright held by the author c. Securities held for investment d. Inventories e. All of the above are capital assets
Question 5
Which of the following sales results in a short-term gain/loss? Select one:
a. A capital asset bought on June 30, 2014 and sold June 20, 2015. b. A capital asset bought on July 25, 2014 and sold August 19, 2015. c. A capital asset bought on September 12, 2008 and sold August 19, 2015. d. A capital asset bought on August 15, 2014 and sold August 16, 2015. e. All of the above are long-term gains/losses.
Question 6
In the current year, Tim sells Section 1245 property for $28,000 that he had purchased 6 years ago. Tim has claimed $7,000 in depreciation on the property and originally purchased it for $20,000. How much of the gain is taxable as ordinary income? Select one:
a. $7,000 b. $8,000 c. $13,000 d. $18,000 e. None of the above is correct
Question 7
Sol purchased land as an investment on January 12, 2010, for $85,000. On January 31, 2015, Sol sold the land for $25,000 cash. In addition, the purchaser assumed the mortgage of $70,000 on the land. What is the amount realized (not gain realized) on the sale of the land? Select one:
a. $10,000 b. $25,000 c. $70,000 d. $95,000 e. None of the above
Question 8
Sol purchased land as an investment on January 12, 2009 for $85,000. On January 31, 2015, Sol sold the land for $30,000 cash. In addition, the purchaser assumed the mortgage of $70,000 on the land. What is the amount of the realized gain or loss on the sale? Select one:
a. $65,000 loss b. $15,000 gain c. $5,000 gain d. $90,000 gain e. None of the above
Question 9
Sol purchased land as an investment on January 12, 2010 for $85,000. On January 31, 2015, Sol sold the land for $90,000 cash. What is the nature of the gain or loss? Select one:
a. Long-term capital loss b. Long-term capital gain c. Short-term capital gain d. Short-term capital loss e. None of the above
Question 10
Perry acquired raw land as an investment 16 years ago. The land cost $60,000. In the current year, the land is sold for a total sales price of $120,000, consisting of $10,000 cash and the buyer's note for $110,000. If Perry elects to recognize the entire gain in the year of sale, what is his recognized gain in the current year? Select one:
a. $50,000 b. $60,000 c. $100,000 d. $110,000 e. None of the above