Friday, June 10, 2011

Quiz 2

 
 
 


Question 1

  1.  
    1. All of the following expenditures generally have a life that is longer than a year and must be capitalized to spread the cost over specified periods EXCEPT:
1 points  

Question 2

  1.  
    2.      Which of the following intangible properties is subject to amortization?


1 points  

Question 3

  1.  
    3.      All of the following assets are Sec. 1231 property, EXCEPT:


1 points  

Question 4

  1.  
    4.      Duke Moxley, a local businessman, completed a number of property sales of both Sec. 1245 and Sec. 1250 property.  Specifically, he had Sec. 1231 losses of $3,000, $7,000, and $9,000, and Sec 1231 gains of $8,000 and $6,200.  All of the following statements are correct EXCEPT:

1 points  

Question 5

  1.  
    5.      Peter Prentiss owns and operates a small printing shop and purchased a small press for his business several years ago at a cost of $8,000.  Last year, Peter sold the press for $3,000 and had claimed depreciation of $4,000.  Which of the following amounts must Peter recapture as ordinary income?


1 points  

Question 6

  1.  
    6.      The term "income-producing property” includes all of the following EXCEPT:



1 points  

Question 7

  1.  
    7.      All of the following are examples of currently deductible business expenses for federal income tax purposes EXCEPT:



1 points  

Question 8

  1.  
    8.   Harry Hanover bought a small rental apartment house in 2002 for $130,000.  Since then, he has had to put on a new roof at a cost of $6,000.  Apart from this, maintenance on the property has required the expenditure of $4,000.  Depreciation claimed on the property since its purchase is $8,000.  Which of the following is Harry’s current adjusted basis in the property?



1 points  

Question 9

  1.  
    9.      Assuming Harry sells the property in Question 8 above, for a net return of $140,000, how much Section 1250 recapture would he have?



1 points  

Question 10

  1.  
    10.  Superstar Corporation buys computer equipment in 2009 for $171,000.  The corporation’s taxable income before depreciation is $500,000.  What is the maximum amount of cost recovery on this equipment that Superstar can deduct in 2009?



1 points  

Question 11

  1.  
    Use the following information to answer items 11 through 13


    Stuart Petrie wants to exchange his fully-rented duplex for Harry Niece’s apartment building.  The duplex has a fair market value of $200,000, an adjusted basis of $75,000, and an existing mortgage of $80,000.  Harry’s building has a fair market value of $250,000, an adjusted basis of $120,000, and an existing mortgage of $130,000.  They are willing to make the trade and are willing to assume each other’s mortgages.


    11.  Which of the following amounts is the gain realized by Stuart in this exchange?


1 points  

Question 12

  1.  
    12.  Which of the following amounts is the gain recognized by Stuart in this exchange


1 points  

Question 13

  1.  
    13.  Which of the following amounts is the substituted basis for the apartment building, assuming Stuart makes this trade?


1 points  

Question 14

  1.  
    14.  Sharon Hyson owns a rental duplex in New York.  She wants to trade with Karen Beech.  Which of the following assets could Sharon accept from Karen to qualify the transaction for like-kind treatment?


1 points  

Question 15

  1.  
    15.  June Harper bought a home with her husband in 1983 for $200,000.  They were divorced in 1995, and Jane became sole owner of the home under the divorce decree.  In October last year, she married Roger Noonan.  Roger and June have been living in the house since the marriage, but they were planning now to move to Florida and are thinking about selling June’s house.  The house has a fair market value of $500,000.  What will Roger and June have to report as taxable capital gain if they sell in December of this year?


1 points  

Question 16

  1.  
    16.  Thomas Wingate sold an antique automobile to a buyer for $32,000.  Thomas acquired the automobile for his collection a few years ago for $20,000.  Thomas received $4,000 in cash at the time of sale and will receive an annual payment of $7,000 over 4 years (payments are to be made on December 1 of each year).  The sale occurred on February 1 of this year.  Which of the following amounts is the gain Thomas must recognize for the current year?


1 points  

Question 17

  1.  
    17.  Claire Stein sold a parcel of raw land to Denise Keller for $45,000.  Claire purchased the land five years ago for $15,000.  Denise agreed to pay 15% in cash this year (year of sale) and agreed to pay $12,750 in each of the next three years on an installment note.  Which of the following amounts is the gain Claire must recognize for the current year?


1 points  

Question 18

  1.  
    18.  George owned a small rental property, which was condemned by the county to enable the extension of a school playground.  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.  Which of the following amounts is his realized gain?


1 points  

Question 19

  1.  
    19.  Using information from Question 18 above, which of the following amounts is George’s recognized gain on the involuntary conversion of the rental property?


1 points  

Question 20

  1.  
    20.  Using the information in Questions 18 and 19, which of the following amounts is George’s basis in the replacement property?


1 points  

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