tax quiz 11-2 - Peter Paulson purchased a residence on...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
September 7, 2011, a tornado completely destroyed their home. The home was insured for its replacement value and homes in Peter's area had appreciated greatly. He received proceeds of $420,000. How much does Peter include? Choose one answer. a. $250,000 b. $240,000 c. $-0- d. $420,000 e. None of the above Peter does not recognize any of the $240,000 realized gain on the involuntary conversion of his home by the tornado because it is less than the $250,000 exclusion allowed for an individual. Correct Marks for this submission: 1/1. Question 2 Marks: 1 Ed Edmonds exchanged a business truck with an adjusted basis of $320,000 for another business truck with a fair market value of $20,000, a boat with a fair market value of $6,000, and $2,000 cash. What is the basis of the new truck? Choose one answer. a. $18,000 b. $20,000 c. $24,000 d. $30,000 e. $32,000 The basis is $24,000 ($32,000 adjusted basis of old asset less the boot received of $8,000). Although there was a realized loss of $4,000, there was no recognized loss. * This question has been adapted from the IRS Examinations. Correct
Background image of page 1

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

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 5

tax quiz 11-2 - Peter Paulson purchased a residence on...

This preview shows document pages 1 - 2. Sign up to view the full document.

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