Question 1

Involuntary conversion gains may be deferred if the proceeds of the involuntary conversion are reinvested.

Accepted Answer

A) True 
 B)False

Question 2

An accrual basis taxpayer accepts a note receivable from a retail customer with a weak credit rating.The taxpayer immediately sells the note to a bank for less than the note's stated value.The taxpayer has an ordinary loss.

Accepted Answer

A) True 
 B)False

Question 3

Section 1239 (relating to the sale of certain property between related taxpayers) does not apply unless the property:

Accepted Answer

A)   Was depreciated by the transferor.
B)   Is depreciable in the hands of the transferee.
C)   Is a capital asset.
D)   Is real property.
E)   None of the above.F) All of the above
G) C) and E)

Question 4

If there is a net § 1231 loss,it is treated as an ordinary loss.

Accepted Answer

A) True 
 B)False

Question 5

Section 1231 property generally includes certain purchased intangible assets (such as patents and goodwill)that are eligible for amortization and held for more than one year.

Accepted Answer

A) True 
 B)False

Question 6

An individual has a $40,000 § 1245 gain,a $35,000 § 1231 gain,a $33,000 § 1231 loss,a $3,000 § 1231 lookback loss,and a $15,000 long-term capital gain.The net long-term capital gain is:

Accepted Answer

A)   $30,000.
B)   $40,000.
C)   $17,000.
D)   $15,000.
E)   None of the above.F) A) and B)
G) A) and C)

Question 7

A lease cancellation payment received by a lessee is generally treated as an exchange because the lease extinguished is usually a capital asset.

Accepted Answer

A) True 
 B)False

Exam 8: Property Transactions: Capital Gains and Losses, section 1231, and Recapture Provisions

Section 1239 (relating to the sale of certain property between related taxpayers) does not apply unless the property:

Correct Answer
verified

Involuntary conversion gains may be deferred if the proceeds of the involuntary conversion are reinvested.

Correct Answer
verified

An individual has a $40,000 § 1245 gain,a $35,000 § 1231 gain,a $33,000 § 1231 loss,a $3,000 § 1231 lookback loss,and a $15,000 long-term capital gain.The net long-term capital gain is:

Correct Answer
verified

A lease cancellation payment received by a lessee is generally treated as an exchange because the lease extinguished is usually a capital asset.

Correct Answer
verified

An accrual basis taxpayer accepts a note receivable from a retail customer with a weak credit rating.The taxpayer immediately sells the note to a bank for less than the note's stated value.The taxpayer has an ordinary loss.

Correct Answer
verified

Section 1231 property generally includes certain purchased intangible assets (such as patents and goodwill)that are eligible for amortization and held for more than one year.

Correct Answer
verified

If there is a net § 1231 loss,it is treated as an ordinary loss.

Correct Answer
verified

Exam 8: Property Transactions: Capital Gains and Losses, section 1231, and Recapture Provisions

Section 1239 (relating to the sale of certain property between related taxpayers) does not apply unless the property:

Correct AnswerverifiedShow Answer

Involuntary conversion gains may be deferred if the proceeds of the involuntary conversion are reinvested.

Correct AnswerverifiedShow Answer

An individual has a $40,000 § 1245 gain,a $35,000 § 1231 gain,a $33,000 § 1231 loss,a $3,000 § 1231 lookback loss,and a $15,000 long-term capital gain.The net long-term capital gain is:

Correct AnswerverifiedShow Answer

A lease cancellation payment received by a lessee is generally treated as an exchange because the lease extinguished is usually a capital asset.

Correct AnswerverifiedShow Answer

An accrual basis taxpayer accepts a note receivable from a retail customer with a weak credit rating.The taxpayer immediately sells the note to a bank for less than the note's stated value.The taxpayer has an ordinary loss.

Correct AnswerverifiedShow Answer

Section 1231 property generally includes certain purchased intangible assets (such as patents and goodwill)that are eligible for amortization and held for more than one year.

Correct AnswerverifiedShow Answer

If there is a net § 1231 loss,it is treated as an ordinary loss.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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