Maude exchanges a business machine for a new business machine. The adjusted basis of the old machine is 62000 and the fair market value of the new machine is 70000. the recognized gain or loss and the basis of the new machine is
a. 0 and 0
b. 0 and 62000
c. 0 and 70000
d. 8000 and 70000"
Roy exchanges a productive use machine adjusted basis of 9000 for a new machine worth 6000 in addition he receives cash of 5000 what is the recognized gain or loss and the basis of the new machine?
a. 0 and 9000
b. 0 and 4000
c. 2000 and 6000
d. 2000 and 9000
MAbel an unmarried taxpayer sells her residence in december 2009 which of the following statements is correct
a. to qualify for the section 1221 exclusion, the residence must be mabels principal residence at the date of the sale
b the maximum section 121 exclusion available to mabel is 25000
c. if mabel sells her principal residence at a loss, her basis for a replacement residence is the cost plus the disallowed loss on the sale.
d. only a and b
e. a, b, and c
The fixed assets of a business are.
a. generally capital assets throughout their holding period
b. generally not capital assets
c. generally are held for investment
d. generally are held for personal use
Which of the following is a capital asset?
a. the bicycle of a 10 year old child. the child purchased the bicycle with money inherited from an aunt.
b. the tools used by a self employed carpenter
c. the lots owned by a company that is in the business of buying and reselling residential building lots.
d. a mint set of 1985 coinds owned by a coin dealer and that is for sale on his website.
a worthless security had a holding period of 11 months when it became worthless on november 10 2009. the investor who had owned the security had a basis of 10000 for it. which of the following is correct?
a. the investor has a long term capital loss of 10000
b. the investor has a short term capital loss of 1000
c. the investor has a nondeductible loss of 10000
d. the investor has a long term capital gain of 10000
Which of the following comparisions is correct?
a. corporations may carryback capital losses, individuals may not
b. both corporations and individual long term capital losses carryover as short term capital losses
c. corporations may carryforward capital losses indefinetly, individuals may only carryforward capital losses for five years.
d. both corporations and individuals may use an alternative tax rte on net capital gains
White company acquires a new machine for 35000 and uses it in whites manufacturing operations. a few months after white places the machine in service, it discovers that the machine is not suitable for whites business. white had fully expensed the machine in the year or acquisition using section 179. white sells the machine for 5000 in the tax year after it was acquired, but held the machine only for a total of 10 months. what was the tax status of the machine when it was disposed of and the amount of the gain or loss?
a. a capital asset and 5000 gain
b. an ordinary asset and 5000 gain
c. a section 1231 asset and 5000 gain
d. a section 1231 asset and 5000 loss.
Which of the following would be includd in the netting of section 1231 gains and losses?
a. nonpersonal use property net casualty gain
b. section 1231 loss
c. section 1231 gain.
d. all of the above
e. b and c
Vertigo inc has a 2009 net section 1231 loss of 24000 and had a 22000 net section 1231 gain in 2008. for 2009 vertigos net section 1231 loss is treated as:
a. ordinary loss
b. ordinary gain
c. capital loss
d. capital gain
Which of the following creates potential section 1245 depreciation recapture and potential section 1231 gain?
a. depreciable equiptment held more than one year and sold for more than its original cost
b. amortizable goodwill held more than on year and disposed of for less than its adjusted basis.
c. land held more than one year and sold for more then was paid for it.
d. inventory held more than one year and sold for more than was paid for it.
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