1. Wally's investment real estate was condemned on November 14, 2013. On February 14, 2014, he received $250,000 for the property that had a basis of $210,000. What is the last date that Wally can acquire replacement property to avoid gain recognition?
a. November 14, 2016
b. February 14, 2017
c. December 31, 2016
d. December 31, 2017
e. None of the above
2. Juan owned a small rental property, which was condemned by the county to expand a local park. His adjusted basis in the property was $40,000 and he received a payment of $75,000 from the county. A year later he purchased a similar piece of real estate for $70,000.What is Juan's recognized gain on the involuntary conversion of his rental property?
a. 0
b. $5,000
c. $10,000
d. $30,000
e. $35,000
3. Corporation P owns 85 percent of Corporation S1; Corporation S1 owns 60 percent of Corporation S2; Corporation S2 owns 90 percent of S3; Corporation S3 owns 60 percent of Corporation S4 and 15 percent of Corporation S2; Corporation S4 owns 100 percent of Corporation S5. Identify the consolidated group(s) of corporations.
a. P-S1-S2-S3-S4-S5
b. P-S1 only
c. P-S1and S2-S3-S4-S5
d. P-S1; S2-S3; and S4-S5
e. P-S1 and S2-S3
4. Jude received a $25,000 distribution from BC Corporation that the corporation identified as $15,000 dividend and $10,000 return of capital. What effect does this distribution have on Jude's taxable income if his basis in the stock of BC is $8,000?
a. Increase of $25,000
b. Increase of $17,000
c. Increase of $15,000
d. Increase of $10,000
5. BarBRanch has had taxable income of $450,000, $570,000, $760,000 and $680,000 in years 2010through 2013, respectively. What were the equal minimum quarterly estimated tax payments for 2013 that Barb Ranch should have made in 2013 to avoid any penalty?
a. $57,676
b. $57,800
c. $64,600
d. $170,000
6. Which of the following is not a separately stated item on a partnership's Schedule K?
a. A $5,000 long term capital loss
b. $20,000 of Section 1245 recapture
c. $3,000 charitable contribution
d. $5,000 bond interest
e. All are separately stated.
7. Stewart is a 30 percent general partner in STP Partnership. His basis in his partnership interest at the beginning of the year was $40,000. During the year, the partnership reported a $30,000 loss and paid off a $120,000 recourse debt. What is Stewart's yearend basis in his partnership interest?
a. 0
b. $4,000
c. $31,000
d. $67,000
8. Samantha and Ashley form the MAS General Partnership. Samantha contributed $20,000 cash in exchange for her 50 percent partnership interest. During the first year of partnership operations, the partnership reported net taxable income of $10,000, Samantha withdrew $8,000 cash from the partnership, and the partnership took out an $18,000 loan on the last day of the year. Samantha's adjusted basis for her partnership interest at year end is:
a. $38,000
b. $30,000
c. $26,000
d. $25,000
e. $20,000
f. $17,000
9. Wilma divorced Barney last year. This year she received the title to Their boat that cost $45,000 and is now worth $55,000. Barney paid Wilma $1,500 per month, $500 for alimony and $1,000 for support of Their two children. Wilma owed $60,000 to the bank for a loan on a failed business. To satisfy the debt, she transferred title of the boat to The bank and paid an additional $5,000. What are the tax consequences Of these transactions for Barney and Wilma?
10. Determine the amount of the capital gain or loss in each of the following transactions and state whether the gain or loss is long-term or short-term.
a. 100 shares of Bilco stock bought for $8,000 on January 22 of year 3 and sold for $10,000 on January 22 of year 4.
b. 20 acres of investment land bought for $8,000 on January 31 of year 3 and sold for $7,000 on February 2 of year 4.
c. 150 shares of Data stock bought for $15,000 on April 1 of year 2 and sold for $17,000 on May 28 of year 4.