Chapter 17 Quiz - 1 Section 1231 property includes...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
1 Section 1231 property includes nonpersonal use property where casualty losses exceed casualty gains for the taxable year. Choose one answer. b. False Correct Correct. Question 2 Cattle must be held more than 18 months to qualify as §1231 property. Choose one answer. b. False Correct Correct. Question 3 Section 1231 property generally does not include accounts receivable arising in the ordinary course of business. Choose one answer. a. True Correct Correct. Question 4 Because the §1231 limited capital gain-type treatment sometimes gives too much tax advantage if assets are eligible for depreciation, certain recapture rules may prevent or reduce the capital gain treatment when depreciation is taken. Choose one answer. a. True Correct Correct. Question 5 Which of the following would be included in the netting of §1231 gains and losses? Choose one answer. d. All of the above. Correct Correct. Question 6 Orange Company (a sole proprietorship) acquires an office building for use in its business on June 10, 2006. The office building becomes a §1231 asset: Choose one answer. a. On June 11, 2007. Correct Correct. Question 7 An individual had the following gains and losses during 2007 on property held for the long-term holding period: sale of Orange common stock ($3,000 gain); sale of real property used in the taxpayer's business ($1,800 loss); destruction of real property used in the taxpayer's business by fire ($1,000 loss). Which of the following is correct? Choose one answer. d. The sale of real property is a §1231 loss.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Question 2 Nonrecaptured §1231 losses from the seven prior tax years may cause current year net §1231 gain to be treated as ordinary income. Choose one answer. b. False Correct Question 3 Personal use property casualty gains and losses are not subject to the §1231 rules. Choose one answer. a. True Correct Question 5 Which of the following is correct? Choose one answer. a. Improperly classifying a §1231 loss as a capital loss might affect adjusted gross income. b. Improperly classifying a capital loss as a §1231 loss might affect adjusted gross income. c. Misclassifying a §1231 gain as a short-term capital gain might affect adjusted gross income. d. Misclassifying a short-term capital gain as a §1231 gain might affect adjusted gross income. e. All of the above. Correct Question 4 The rules regarding §1231 treatment apply to all business property. Choose one answer. b. False Question 6 A machine used in business is stolen. The original cost of the machine four years ago was $56,000, its adjusted basis was zero at the time of the theft, and $44,000 was recovered from the business' insurance policy. There are no other casualties or thefts and no other business depreciable asset dispositions during the year. Which of the statements below is correct?
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 8

Chapter 17 Quiz - 1 Section 1231 property includes...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online