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Federal income taxation Quiz

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b.Only statement II is correct.c.Both statements are correct.d.Neither statement is correct.2.For depreciable real property, all depreciation taken must be recaptured and treated as ordinary income.TrueFalse3.A taxable entity has the following capital gains and losses in 2014:Short-term capital loss$(20,000)Long-term capital gain13,000I.If the entity is an individual, a $7,000 deduction is allowed in 2014.II.If the entity is a corporation, no deduction is allowed in 2014.a.Neither statement is correct.b.Only statement I is correct. c.Only statement II is correct.d.Both statements are correct.4.Corky receives a gift of property from her Aunt Cynthia. Cynthia purchased the property 17 years ago for $375,000. On the date of the gift, the property is appraised at $500,000. What is Corky's holding period for the property if she sells it one month after the gift was completed?a.Short-term.b.Holding period is not relevant since the gain is ordinary.c.Holding period classification cannot be determined without knowing the selling price. d.Long-term.5.Omicron Corporation had the following capital gains and losses for 2012 through 2014:201220132014$15,000$(30,000)$60,000?Omicron's net capital gain for 2014 is:a.$20,000b.$45,000c.$60,000d.$30,0006.During 2014, Thomas has a net Section 1231 gain of $57,000. In 2013, Thomas reported a net Section 1231 loss of $60,000. What is the character of the 2014 gain?a.$57,000 ordinary gain.b.$57,000 long-term capital loss.c.$60,000 ordinary gain.d.$60,000 long-term capital gain.e.$57,000 long-term capital gain.7.Gains on the sale of certain types of business assets, referred to as Section 1231 property, are always treated as capital gains.TrueFalse8.Davidson Corporation has the following gains and losses from Section 1231 property during 2014:Casualty losses$(6,000)Casualty gains7,000Section 1231 gains6,000Section 1231 losses(9,000)?No net Section 1231 losses have been deducted as ordinary losses in prior years. How much of the 2014 Section 1231 gains and losses are recognized as long-term capital gains?a.$6,000b.$2,000c.$1,000 d.$- 0 -e.$3,0009.Section 1231 property receives preferential tax treatment. The preference(s) include(s)I.Net Section 1231 losses are deductible as short-term capital losses.II.Net Section 1231 gains are reportable as long-term capital gains.III.Net Section 1231 losses are deductible as long-term capital losses.IV.Net Section 1231 losses are deductible as ordinary losses.a.Statements II and IV are correct.b.Statements I and II are correct.c.Statements II and III are correct.d.Only statement I is correct.e.Only statement III is correct.10.The Section 1231 netting procedure involves several steps. What is the proper order of these steps?I.All Section 1231 gains and losses for the year are netted.II.All casualty (theft) gains and losses on Section 1231 property are netted.III.Current-year net Section 1231 gain is netted against any Section 1231 ordinary loss deductions taken in the previous 5 years.?a.Statements I, III, and II.b.Statements III, I, and II.c.Statements III, II, and I.d.Statements II, I, and III.e.Statements I, II, and III.

 

Paper#37612 | Written in 18-Jul-2015

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