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Chapter 13 Quiz - recognized gain 4 If boot is received in...

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ch 13 quiz True/False Indicate whether the statement is true or false. ____ 1. Molanda sells a parcel of land for $18,000 in cash and the buyer assumes Molanda’s mortgage of $12,000 on the land. Molanda’s amount realized is $30,000. ____ 2. Cassie purchases a sole proprietorship for $125,000. The fair market value of the tangible assets is $100,000 and the agreed to value of goodwill is $15,000. Assuming there are no other intangible assets, Cassie’s basis for the tangible assets is $108,696 ($100,000 + $8,696) and her basis for the goodwill is $16,304 ($15,000 + $1,304). ____ 3. Shari exchanges an office building in New Orleans (adjusted basis of $700,000) for an apartment building in Baton Rouge (fair market value of $900,000). In addition, she receives $100,000 of cash. Shari’s recognized gain is $100,000 and her basis for the apartment building is $800,000 ($700,000 adjusted basis + $100,000
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Unformatted text preview: recognized gain). ____ 4. If boot is received in a § 1031 like-kind exchange that results in some of the realized gain being recognized, the holding period for both the like-kind property and the boot received begins on the date of the exchange. ____ 5. Taxpayer owns a home in Atlanta. His company transfers him to Chicago on January 2, 2010, and he sells the Atlanta house in early February. He purchases a residence in Chicago on February 3, 2010. On December 15, 2010, taxpayer’s company transfers him to Los Angeles. In January 2011, he sells the Chicago residence and purchases a residence in Los Angeles. Because multiple sales have occurred within a two-year period, § 121 treatment does not apply to the sale of the second home....
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