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Alix is negotiating to buy land from Shicquonna. What will Alix?s basis

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46. Alix is negotiating to buy land from Shicquonna. What will Alix?s basis be in the land, if Alix gives Shicquonna $75,000 and Alix assumes Shicquonna?s mortgage on the land of $50,000?;a. $25,000;b. $50,000;c. $75,000;d. $125,000 (the $75,000 cash paid plus $50,000 mortgage assumed);47. Which of the following is LEAST likely to qualify as a like-kind exchange under Section 1031 (assume all of the assets are used for business)?;a. Improved real estate for unimproved real estate;b. Office building for a warehouse;c. Office furniture for office equipment;d. Unimproved real estate for computer equipment (generally 1031 exchanges are for similar property, these two are the least similar in nature);48. Andrea exchanges undeveloped real estate for developed real estate on July 30, 2014. On July 30, 2014, the fair market value of each property is $600,000. Andrea had purchased the undeveloped real estate on February 14, 2002, for $300,000. Both properties are considered investment property for Andrea. Which of the following is FALSE?;a. Andrea?s basis in the developed real estate is $300,000;b. Andrea will realize a gain of $300,000 from the July 30, 2014 transaction;c. Andrea will recognize a gain of $300,000 from the July 30, 2014 transaction (this can be treated as a like-kind exchange so Andrea can defer her $300,000 gain);d. If Andrea sells the developed real estate in June of 2015 for a gain, the gain will most likely be treated as a long-term gain;49. In October 2010, Miranda purchased a playground set at a garage sale for $100. Miranda is not in the business of buying and selling anything. Miranda researched the playground set online and discovered it was worth $700. In July 2014, Miranda sold the playground set through an auction website for that amount (i.e., $700). Which of the following is TRUE considering these transactions?;a. Miranda does not have any income;b. Had Miranda sold the playground set for $25, Miranda could have deducted a $75 ordinary loss;c. Miranda has a $600 short-term capital gain;d. Miranda has a $600 long-term capital gain ($700 sold price - 100 purchase price = 600 and the asset was held for over 3 years so is long-term);50. Kathryn had the following net Section 1231 results for each of the years shown below.;Tax Year Net Section 1231 LOSS Net Section 1231 GAIN;2009 $0 $0;2010 $0 $0;2011 $0 $0;2012 $10,000;2013 $5,000;2014 $25,000;Which of the following is TRUE regarding the net Section 1231 gain in;2014?;a. All $25,000 will all be taxed at Kathryn?s ordinary income rate;b. All $25,000 will all be taxed at Kathryn?s long-term capital gain rate;c. Only $15,000 of the $25,000 will be taxed at Kathryn?s ordinary income rate (she must recapture the prior year losses deducted at ordinary rates);d. Only $10,000 of the $25,000 will be taxed at Kathryn?s ordinary income rate

 

Paper#19407 | Written in 18-Jul-2015

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