CHAPTER 14–PROPERTY TRANSACTIONS

| November 9, 2018

10.
The amount received for a utility easement on land
is included in the gross income of the taxpayer. True False

11.
A realized gain on the sale or exchange of a
personal use asset is recognized, but a realized loss on the sale, exchange, or
condemnation of a personal use asset is not recognized.

True False

12.
A realized gain whose recognition is postponed
results in the temporary recovery of less than the taxpayer’s cost or other
basis.

True False

13.
A realized loss whose recognition is postponed
results in the temporary recovery of more than the taxpayer’s cost or other
basis.

True False

2

21.
In the case of a bargain purchase, the adjusted
basis of an asset can exceed the cost of the asset to the purchaser.

True False

22.
When a taxpayer has purchased several lots of
stock on different dates at different purchase prices and cannotidentify
the lot of stock that is being sold, he may choose which lot of stock is deemed
to besold.

True False

23.
Cassie purchases a sole proprietorship for
$125,000. The fair market value of the tangible assets is $100,000 and the
agreed to value of goodwill is $15,000. Assuming there are no other intangible
assets, Cassie’s basis for the tangible assets is $108,696 ($100,000 + $8,696)
and her basis for the goodwill is $16,304 ($15,000 + $1,304).

True False

24.
Purchased goodwill is assigned a basis, but
developed or self-created goodwill is not assigned a basis. True False

25.
Nontaxable stock dividends result in no change to
the total basis of the old and new stock. True False

26.
The holding period of nontaxable stock rights
includes the holding period of the stock on which the rights were distributed.

True False

27.
Angela receives stock (worth $11,000) as a gift
from her aunt. Her aunt’s adjusted basis is $7,000 and the transfer did not
result in a gift tax. Angela’s basis in the stock is $11,000.

True False

28.
This year, Fran receives a birthday gift of stock
worth $75,000 from her aunt. The aunt has owned the stock (adjusted basis
$50,000) for 10 years and pays gift tax of $27,000 on the transfer. Fran’s
basis in the stock is $75,000—the lesser of $77,000 ($50,000 + $27,000) or
$75,000.

True False

29.
Todd gives Sam stock (adjusted basis of $72,000;
fair market value of $69,000). Sam later sells the stock for $71,000. Sam’s
recognized loss is $1,000 ($71,000 amount realized – $72,000 adjusted basis).

True False

30.
A donee receives depreciable property worth
$85,000 (basis to donor of $150,000) with no gift tax being paid on the
transfer. The donee’s basis for depreciation purposes is $85,000.

True False

31.
The holding period for property acquired by gift
is automatically long term. True False

3

32. The basis
of property received by inheritance is a carryover basis. True False

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