Question 1 Carolyn transfers property with an adjusted basis of $50,000 and a FMV of $60,000 in exchange for Prime Corporation stock in a Sec. 351 transaction. Carolyn's basis in the stock is $60,000. $50,000. $10,000. $0. Question 2 Ralph transfers property with an adjusted basis of $65,000 and a FMV of $70,000 to Lake Corporation in a Sec. 351 transaction. Ralph receives stock worth $60,000 and a short-term note having a $10,000 FMV. Ralph's basis in the stock is $75,000. $70,000. $65,000. $60,000. Question 3 Sarah transfers property with an $80,000 adjusted basis and a $100,000 FMV to Super Corporation in a Sec. 351 transaction. Sarah receives stock with an $85,000 FMV and a short-term note with a $15,000 FMV. Sarah's basis in the stock is $100,000. $95,000. $85,000. $80,000. Question 4 The transferor's holding period for any stock received in exchange for a capital asset includes the holding period for the property transferred. begins on the day after the exchange. begins on the day of the exchange. none of the above Question 5 Trail Corporation has gross profits on sales of $140,000 and deductible expenses of $180,000. In addition, Trail has a net capital gain of $60,000. Trail's taxable income is $20,000 loss. $40,000 loss. $60,000. $20,000. Question 6 Identify which of the following is false. Corporations that sell real property at a gain must report an additional 20% of the entire gain as ordinary income. Corporations selling real property that previously had been depreciated using an accelerated method are subject to Sec. 291. Section 291 reduces the amount of net Sec. 1231 gains that can be offset by corporate capital losses. Section 291 recapture applies to Sec. 1250 property. Question 7 Dallas Corporation, not a dealer in securities, realizes taxable income of $60,000 from the operation of its business. Additionally, in the same year Dallas realizes a long-term capital loss of $10,000 from the sale of marketable securities. If the corporation realizes no other capital gains or losses, what is the proper treatment for the $10,000 long-term capital loss on the tax return? Use $3,000 of the loss to reduce taxable income and carry $7,000 of the long-term capital loss forward for five years. Use $6,000 of the loss to reduce taxable income by and carry $4,000 of the long-term capital loss forward for five years. Use $10,000 of the long-term capital loss to reduce taxable income. Carry the $10,000 long-term capital loss back three years as a short-term capital loss then forward five years. Question 8 Evans Corporation has a $15,000 net capital loss in 2007. The corporation reported the following capital gain net income during the past three years. Identify which of the following statements is true. Year Capital Gain/Net Income 2006 $10,000 2007 $11,000 2008 $5,000 The loss is used to offset the gains from 2006 and then carried back to offset $10,000 of the gains in 2007. The loss is used to offset the $11,000 of the 2007 gains and then carried back to offset $4,000 of the year 2006 net gain. The loss is used to offset $3,000 of the current year ordinary income, all of the year 2007 capital gains and $7,000 of the year 2008 net gain. The loss is used to offset the year 2006 net gains, then $5,000 of the year 2007 net gains. Question 9 Booth Corporation sells a building classified as a residential rental property for $200,000. The MACRS straight-line depreciation taken is $20,000 and the adjusted basis of the building is $170,000. Booth Corporation must recognize ordinary income of $30,000. $20,000. $4,000. $0 Question 10 Which of the following items indicate that a company does not need a valuation allowance? Existing sales contracts that will produce sufficient income to realize the deferred tax asset. Excess of appreciated asset value over tax basis sufficient to realize the deferred tax asset. A strong history of earnings without considering the deferred tax asset. All of the above.,I don't understand the question you are asking. Please explain.,Only 4 out of the 10 questions were correct.
Paper#3028 | Written in 18-Jul-2015Price : $25