1. A taxpayer purchased business machinery on February 16, 2012, for $25,000. The machinery was sold for $26,000 on November 10, 2013. Depreciation information is as follows:

	Accelerated depreciation taken	$9,000
	Straight-line depreciation (7-year life) would have been	5,000

What is the gain or loss on the sale of this machinery, and how will it be treated on the tax return?

Question 1 options:

1)	$4,000 ordinary income and $6,000 Section 1231 gain

2)	$4,000 ordinary income and $6,000 long-term capital gain

3)	$9,000 ordinary income and $1,000 Section 1231 gain

4)	$9,000 ordinary income and $1,000 long-term capital gain

5)	None of the above.

2. An unmarried taxpayer sells the following capital assets during the year.

	Property	Date Acquired	Date Sold	Sales Price	Adjusted Basis
	1	6/4/12	4/6/13	$10,000	$14,000
	2	1/8/11	12/15/13	15,000	17,000

The taxpayer carries over to the next tax year:

Question 2 options:

1)	a $4,000 short-term capital loss.

2)	a $1,000 short-term capital loss and a $2,000 long-term capital loss.

3)	a $3,000 short-term capital loss.

4)	a $2,000 short-term capital loss and a $1,000 long-term capital loss.

5)	A $3,000 long-term capital loss.

3. In 2014, Rick had a $12,000 gain on the sale of stock purchased three years ago, a $7,000 loss on the sale of a personal use automobile, and a $3,000 loss from the sale of land used in his business (owned for six years). These are Rick's only property transactions during the year. Once the netting process is complete, on his tax return Rick's gains and losses will be treated as:

Question 3 options:

1)	a $3,000 ordinary loss and a $9,000 net long-term capital loss.

2)	a $2,000 net long-term capital gain.

3)	a $3,000 ordinary loss and a $12,000 net long-term capital gain.

4)	a $9,000 net long-term capital gain.

5)	none of the above.

4. The taxpayer's adjusted basis in a certified historic structure is $100,000. During the year, the taxpayer spends $120,000 to rehabilitate the building. The taxpayer's adjusted basis in the building after taking into consideration the improvements and the rehabilitation credit is:

Question 4 options:

1)

$220,000.

2)

$196,000.

3)

$208,000.

4)

$176,000.

5)	None of the above.