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Ch 12-14 practice T-F

Ch 12-14 practice T-F - Chapter 12 1 The basis of...

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Chapter 12 1. The basis of replacement property in a nonrecognition transaction is the adjusted basis of the property received less any deferred gain. 2. The mechanism for effecting a deferral in a nonrecognition transaction is an adjustment of the replacement asset's basis. 3. Simon exchanged his Mustang for Michael's Econovan so that he could go hunting. The exchange does not qualify as a like-kind exchange since the assets are personal. 4. When two qualified assets are exchanged and their fair market values are not equal, "boot" can be used to equalize the transaction without disqualifying the nonrecognition transaction. 5. A gain on a like-kind exchange is always recognized to the extent of any boot received. 6. The holding period of an asset received in a like-kind exchange includes the holding period of the transferred asset. 7. The deferral of a gain realized on an involuntary conversion is mandatory.
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