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qiuz last ones - Question1 Marks 1 When property that is...

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Question 1 Marks: 1 When property that is subject to an existing debt is purchased, the basis of the property is the amount of cash paid initially plus the unpaid debt to which the property is subject. Answer: True False Cost includes cash paid and any debt to which the property is subject. Correct Marks for this submission: 1/1. Question 2 Marks: 1 The basis of property acquired from a decedent is the fair market value of the property at the date of receipt of the property. Answer: True False The general rule for the basis of property acquired from a decedent is that it is the fair market value of the property at the date of death of the decedent. Correct Marks for this submission: 1/1. Question 3 Marks: 1 Unless the taxpayer can specifically identify the shares of stock that are sold or transferred, the FIFO rule comes into play (i.e., the stock sold is charged against the earliest of the stock purchases). Answer: True False FIFO is used unless the stock is specifically identified. Incorrect Marks for this submission: 0/1. Question 4 Marks: 1 Doug Doolittle receives a nontaxable stock dividend of 20 shares of Edwards Corporation common stock with a fair market value at distribution of $800. Doug previously owned 100 shares of Edwards Corporation common stock which he
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purchased three years ago for $6,000. The basis per share of the 20 shares of Edwards Corporation stock is: Choose one answer. a. $0 b. $40 c. $50 d. $60 $6,000 divided by 120 shares = $50 per share. This was a nontaxable stock dividend of identical shares. Correct Marks for this submission: 1/1. Question 5 Marks: 1 Leonard London sold a building used in his business to Michelle Martinson. He had purchased the property several years previously for $340,000, $300,000 of which was the mortgage. Major improvements in the amount of $240,000 had been made. At the time of the sale, Leonard had taken $220,000 in straight-line depreciation. Leonard paid $104,000 in selling expenses. Michelle gave Leonard $400,000 in cash and unlike property with a fair market value of $240,000, assumed a delinquent real estate bill of $105,000 and assumed Leonard’s mortgage on the property in the amount of $234,000. What is Leonard’s gain on the sale? Choose one answer. a. $191,000 b. $385,000 c. $410,000 d. $503,000 e. $515,000 $515,000. $875,000 amount realized [($979,000 ($400,000 + $240,000 + $105,000 + $234,000) - $104,000 selling expenses] less $360,000 adjusted basis. Correct Marks for this submission: 1/1. Question 6
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Marks: 1 Property converted to business use is sold. The adjusted basis of the property at the time of conversion is used to determine the gain. Answer: True False The adjusted basis of the property at the time of conversion is used to determine the gain. Correct Marks for this submission: 1/1. Question 7 Marks: 1 Bill Burns purchases furniture from his employer for $5,000 during 2011. The fair market value of the furniture is $8,500. What is Bill's basis in the furniture?
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