Question 1

A business machine purchased April 10,2012,for $98,000 was fully depreciated in 2012 using § 179 immediate expensing.On August 15,2014,the machine was sold for $67,000.What is the amount and nature of the gain or loss from disposition of the machine?

Accepted Answer

The machine was a § 1231 asset because i...

Question 2

For § 1245 recapture to apply,accelerated depreciation must have been taken on the property.

Accepted Answer

A) True 
 B)False

Question 3

Part III of Form 4797 is used to report gains from the sale of depreciable business equipment sold at a gain and held more than one year.

Accepted Answer

A) True 
 B)False

Question 4

Verway,Inc. ,has a 2014 net § 1231 gain of $55,000 and had a $62,000 net § 1231 loss in 2013.For 2014,Verway's net § 1231 gain is treated as:

Accepted Answer

A)  $55,000 ordinary loss.
B)  $55,000 ordinary gain.
C)  $55,000 capital loss.
D)  $55,000 capital gain.
E)  None of these.F) C) and D)
G) B) and C)

Question 5

Describe the circumstances in which the maximum unrecaptured § 1250 gain (25% gain)does not become part of the Schedule D netting process for an individual taxpayer?

Accepted Answer

Unrecaptured § 1250 gain (25% gain)is so...

Question 6

A business machine purchased April 10,2013,for $62,000 was fully depreciated in 2013 using § 179 immediate expensing.On August 15,2014,the sole proprietor who owned the machine gave it to his son.On that date,the machine's fair market value was $57,000.The son did not use the machine in business or hold it as inventory and the machine was sold on November 22,2014,for $53,000.What is the amount and nature of the gain or loss from disposition of the machine? Where is it reported in the son's tax return?

Accepted Answer

A gift does not extinguish potential § 1...

Question 7

The maximum § 1245 depreciation recapture generally equals the accumulated depreciation.

Accepted Answer

A) True 
 B)False

Question 8

If § 1231 asset casualty gains and losses net to a gain,the gain is treated as a § 1231 gain.

Accepted Answer

A) True 
 B)False

Question 9

The chart below describes the § 1231 assets sold by the Ecru Company (a sole proprietorship)this year.Compute the gain or loss from each asset disposition and determine the net § 1231 gain treated as long­term capital gain for the year.Assume there is a § 1231 lookback loss of $4,000.

Accepted Answer

The stamping machine ($21,736),tractor (...

Question 10

Vertigo,Inc. ,has a 2014 net § 1231 loss of $64,000 and had a $32,000 net § 1231 gain in 2013.For 2014,Vertigo's net § 1231 loss is treated as:

Accepted Answer

A)  Ordinary loss.
B)  Ordinary gain.
C)  Capital loss.
D)  Capital gain.
E)  None of these.F) C) and E)
G) B) and E)

Exam 17: Property Transactions: 1231 and Recapture Provisions

Correct Answer
verified
A gift does not extinguish potential § 1...
View Answer

A business machine purchased April 10,2012,for $98,000 was fully depreciated in 2012 using § 179 immediate expensing.On August 15,2014,the machine was sold for $67,000.What is the amount and nature of the gain or loss from disposition of the machine?

Correct Answer
verified
The machine was a § 1231 asset because i...
View Answer

The chart below describes the § 1231 assets sold by the Ecru Company (a sole proprietorship)this year.Compute the gain or loss from each asset disposition and determine the net § 1231 gain treated as longterm capital gain for the year.Assume there is a § 1231 lookback loss of $4,000.

Correct Answer
verified
The stamping machine ($21,736),tractor (...
View Answer

Verway,Inc. ,has a 2014 net § 1231 gain of $55,000 and had a $62,000 net § 1231 loss in 2013.For 2014,Verway's net § 1231 gain is treated as:

Correct Answer
verified

If § 1231 asset casualty gains and losses net to a gain,the gain is treated as a § 1231 gain.

Correct Answer
verified

Part III of Form 4797 is used to report gains from the sale of depreciable business equipment sold at a gain and held more than one year.

Correct Answer
verified

Vertigo,Inc. ,has a 2014 net § 1231 loss of $64,000 and had a $32,000 net § 1231 gain in 2013.For 2014,Vertigo's net § 1231 loss is treated as:

Correct Answer
verified

The maximum § 1245 depreciation recapture generally equals the accumulated depreciation.

Correct Answer
verified

For § 1245 recapture to apply,accelerated depreciation must have been taken on the property.

Correct Answer
verified

Describe the circumstances in which the maximum unrecaptured § 1250 gain (25% gain)does not become part of the Schedule D netting process for an individual taxpayer?

Correct Answer
verified
Unrecaptured § 1250 gain (25% gain)is so...
View Answer

Exam 17: Property Transactions: 1231 and Recapture Provisions

Correct AnswerverifiedA gift does not extinguish potential § 1...View AnswerShow Answer

A business machine purchased April 10,2012,for $98,000 was fully depreciated in 2012 using § 179 immediate expensing.On August 15,2014,the machine was sold for $67,000.What is the amount and nature of the gain or loss from disposition of the machine?

Correct AnswerverifiedThe machine was a § 1231 asset because i...View AnswerShow Answer

The chart below describes the § 1231 assets sold by the Ecru Company (a sole proprietorship)this year.Compute the gain or loss from each asset disposition and determine the net § 1231 gain treated as long­term capital gain for the year.Assume there is a § 1231 lookback loss of $4,000.

Correct AnswerverifiedThe stamping machine ($21,736),tractor (...View AnswerShow Answer

Verway,Inc. ,has a 2014 net § 1231 gain of $55,000 and had a $62,000 net § 1231 loss in 2013.For 2014,Verway's net § 1231 gain is treated as:

Correct AnswerverifiedShow Answer

If § 1231 asset casualty gains and losses net to a gain,the gain is treated as a § 1231 gain.

Correct AnswerverifiedShow Answer

Part III of Form 4797 is used to report gains from the sale of depreciable business equipment sold at a gain and held more than one year.

Correct AnswerverifiedShow Answer

Vertigo,Inc. ,has a 2014 net § 1231 loss of $64,000 and had a $32,000 net § 1231 gain in 2013.For 2014,Vertigo's net § 1231 loss is treated as:

Correct AnswerverifiedShow Answer

The maximum § 1245 depreciation recapture generally equals the accumulated depreciation.

Correct AnswerverifiedShow Answer

For § 1245 recapture to apply,accelerated depreciation must have been taken on the property.

Correct AnswerverifiedShow Answer

Describe the circumstances in which the maximum unrecaptured § 1250 gain (25% gain)does not become part of the Schedule D netting process for an individual taxpayer?

Correct AnswerverifiedUnrecaptured § 1250 gain (25% gain)is so...View AnswerShow Answer

Correct Answer
verified
A gift does not extinguish potential § 1...
View Answer

Correct Answer
verified
The machine was a § 1231 asset because i...
View Answer

The chart below describes the § 1231 assets sold by the Ecru Company (a sole proprietorship)this year.Compute the gain or loss from each asset disposition and determine the net § 1231 gain treated as longterm capital gain for the year.Assume there is a § 1231 lookback loss of $4,000.

Correct Answer
verified
The stamping machine ($21,736),tractor (...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Unrecaptured § 1250 gain (25% gain)is so...
View Answer