29. Joyce exchanges a machine used in her trade or business foranother machine. In addition, she gives 200 shares of AlphaCorporation stock which have a fair market value of $38,000 and abasis of $29,000. The old machine has an adjusted basis of $36,000and the new machine has a fair market value of $100,000. What isthe recognized gain or loss and the basis of the new machine?
a. $26,000 and $74,000.
b. $9,000 and $74,000.
c. $26,000 and $100,000.
d. $9,000 and $100,000.
e. None of the above.
30. In order to qualify for like-kind exchange treatment:
a. The form of the transaction must bean exchange.
b. Both the property transferred and theproperty given must be held for productive use in a trade orbusiness or for investment.
c. The property must be like kind.
d. All of the above.
e. None of the above.
31. In regard to nontaxable exchanges which, if any, of thefollowing is correct?
a. Neitherrealized gains or losses are recognized.
b. Realized gainsare not recognized but realized losses are recognized.
c. Realizedgains and losses are recognized.
d. Realized lossesare not recognized but realized gains are recognized.
e. None of theabove.
32. Taxpayer receives stock as a gift from his nephew. Theadjusted basis of the stock is $15,000 and the fair market value is$37,000. Taxpayer trades the stock for bonds with a fair marketvalue of $35,000 and $2,000 cash. What is his recognized gain andthe basis for the bonds?
a. $2,000,$17,000.
b. $0, $15,000.
c. $2,000,$15,000.
d. $22,000,$35,000.
e. None of theabove.
29. Joyce exchanges a machine used in her trade or business foranother machine. In addition, she gives 200 shares of AlphaCorporation stock which have a fair market value of $38,000 and abasis of $29,000. The old machine has an adjusted basis of $36,000and the new machine has a fair market value of $100,000. What isthe recognized gain or loss and the basis of the new machine?
a. $26,000 and $74,000.
b. $9,000 and $74,000.
c. $26,000 and $100,000.
d. $9,000 and $100,000.
e. None of the above.
30. In order to qualify for like-kind exchange treatment:
a. The form of the transaction must bean exchange.
b. Both the property transferred and theproperty given must be held for productive use in a trade orbusiness or for investment.
c. The property must be like kind.
d. All of the above.
e. None of the above.
31. In regard to nontaxable exchanges which, if any, of thefollowing is correct?
a. Neitherrealized gains or losses are recognized.
b. Realized gainsare not recognized but realized losses are recognized.
c. Realizedgains and losses are recognized.
d. Realized lossesare not recognized but realized gains are recognized.
e. None of theabove.
32. Taxpayer receives stock as a gift from his nephew. Theadjusted basis of the stock is $15,000 and the fair market value is$37,000. Taxpayer trades the stock for bonds with a fair marketvalue of $35,000 and $2,000 cash. What is his recognized gain andthe basis for the bonds?
a. $2,000,$17,000.
b. $0, $15,000.
c. $2,000,$15,000.
d. $22,000,$35,000.
e. None of theabove.
Related questions
Kase, an individual, purchased some property in Potomac,Maryland, for $242,000 approximately 10 years ago. Kase isapproached by a real estate agent representing a client who wouldlike to exchange a parcel of land in North Carolina for KaseâsMaryland property. Kase agrees to the exchange.
| What is Kaseâs realized gain or loss, recognized gain or loss,and basis in the North Carolina property in each of the followingalternative scenarios? (Loss amounts should be indicated bya minus sign.) â1) The transaction qualifies as a like-kindexchange and the fair market value of each property is $715,000.(Leave no answer blank. Enter zero ifapplicable.) a) Realized Gain?___ b) recognized gain 0 âc) Adjusted basis in new property?_____ â2) The transaction qualifies as a like-kind exchange and the fairmarket value of each property is $202,000. (Leave no answerblank. Enter zero if applicable.) a) Realized Gain?___ b) recognized gain 0 âc) Adjusted basis in new property?_____
|
John borrowed $4,500 to purchase a machine. He later borrowed$2,000 using the machine as collateral. Both notes are nonrecourse.Ten years later, the machine has an adjusted basis of zero and twooutstanding not balances of $2,500 and $800. John sells the machinesubject to the two liabilities for $1,000. What is his realizedgain or loss?â
| a. | âNone of the above. | |
| b. | â$4,300 | |
| c. | â$0. | |
| d. | â$3,300. | |
| e. | â$1,000. |
10 points
QUESTION 2
Angelica purchases a house for $165,000. She converts theproperty to rental property when the fair market value is $140,000.After deducting depreciation (cost recovery) expense of $3,130, shesells the house for $100,000. What is her recognized gain orloss?â
| a. | â($65,000). | |
| b. | â($36,870). | |
| c. | âNone of the above. | |
| d. | â$0. | |
| e. | â($62,870). |
10 points
QUESTION 3
Olivia and Matthew exchange real estate in a like-kind exchange.Olivia's basis in the real estate, subject to a $100,000 mortgage,is $250,000 and the fair market value is $400,000. She receivesreal estate with a fair market value of $300,000 and Matthewassumes the mortgage. What is Olivia's recognized gain and adjustedbasis for the real estate received?â
| a. | âNone of the above. | |
| b. | â$50,000, $400,000. | |
| c. | â$100,000, $250,000. | |
| d. | â$100,000, $400,000. | |
| e. | â$0, $250,000. |
10 points
QUESTION 4
On October 1, Denise exchanged an apartment building (adjustedbasis of $575,000 and subject to a mortgage of $325,000) foranother apartment building owned by Quinn (fair market value of$850,000 and subject to a mortgage of $325,000). The propertytransfers were made subject to the outstanding mortgages. Whatamount of gain should Denise recognize?â
| a. | â$0. | |
| b. | â$50,000. | |
| c. | âNone of the above. | |
| d. | â$225,000. | |
| e. | â$275,000. |
10 points
QUESTION 5
Maple, Inc., owns a delivery truck which initially cost $40,000.After depreciation of $25,000 had been deducted, the truck wastraded-in on a new truck that cost $50,000. Maple was required topay the car dealer $20,000 in cash. What is Maple's basis for thenew truck assuming the exchange qualifies for §1031 treatment?â
| a. | â$0. | |
| b. | â$15,000. | |
| c. | â$35,000. | |
| d. | â$50,000. | |
| e. | âNone of the above. |
10 points
QUESTION 6
Miriam gifted property to her brother Aaron on January 25, 2016at which time it had a fair market value of $35,000. Miriam had anadjusted basis in the property of $40,000. Assume that Aaron soldthe property on June 20, 2016 for $90,000.
What amount should Aaron use for his basis?
| a. | â$90,000 | |
| b. | â$40,000 | |
| c. | âNone of the above | |
| d. | â$0 | |
| e. | â$35,000 |
10 points
QUESTION 7
Miriam gifted property to her brother Aaron on January 25, 2016at which time it had a fair market value of $35,000. Miriam had anadjusted basis in the property of $40,000. Assume that Aaron soldthe property on June 20, 2016 for $90,000.
â
What amount of gain/(loss) should Aaron recognize on thesale?â
| a. | âNone of the above | |
| b. | â$55,000 | |
| c. | â$50,000 | |
| d. | â$40,000 | |
| e. | â$90,000 |
10 points
QUESTION 8
Miriam gifted property to her brother Aaron on January 25, 2016at which time it had a fair market value of $35,000. Miriam had anadjusted basis in the property of $40,000.
â
What amount of gain/(loss) should Aaron recognize assuming hesold the property for $36,500 on 6/20/16?
| a. | âNone of the above. | |
| b. | $1,500 âShort-term capital gain | |
| c. | â$0 | |
| d. | â$3,500 Short-term capital loss | |
| e. | â$1,500 Long-term capital gain |
10 points
QUESTION 9
Miriam gifted property to her brother Aaron on January 25, 2016at which time it had a fair market value of $35,000. Miriam hadacquired the property in 1988 and had an adjusted basis in theproperty of $40,000.
â
What amount of gain/(loss) should Aaron recognize assuming hesold the property for $30,000 on 6/20/16?
| a. | â($5,000) Short-term Loss. | |
| b. | âNo Gain or Loss recognized. | |
| c. | âNone of the above | |
| d. | â($10,000) Short-term Loss. | |
| e. | â($10,000) Long-term Loss. |
10 points
QUESTION 10
Miriam gifted property to her brother Aaron on January 25, 2016at which time it had a fair market value of $90,000. Miriamacquired the property in 1966 and had an adjusted basis in theproperty of $40,000.
â
What amount of gain/(loss) should Aaron recognize assuming hesold the property for $100,000 on 6/20/16?
| a. | â$10,000 Long-term capital gain. | |
| b. | âNone of the above. | |
| c. | â$10,000 Short-term capital gain. | |
| d. | â$60,000 Long-term capital gain. | |
| e. | â$60,000 Short-term capital gain. |
