1) On September 20, 2017, Greg entered into an agreement to exchange an eight-unit rental apartment building for a four-unit rental apartment building. The closing took place on October 20, 2017 at which time the transfers were completed. Gregs adjusted basis for the eight-unit building was $320,000 and the fair market value was $400,000. The fair market value of the four-unit building, which was subject to a $40,000 mortgage, was $440,000 on the date of the transaction. What, if any, is Gregs taxable gain?

a. $120,000

b. $80,000

c. $48,000

d. $40,000

e. $0

2) On September 20, 2017, Greg entered into an agreement to exchange an eight-unit rental apartment building for a four-unit rental apartment building. The closing took place on October 20, 2017 at which time the transfers were completed. Gregs adjusted basis for the eight-unit building was $320,000 and the fair market value was $400,000. The fair market value of the four-unit building, which was subject to a $40,000 mortgage, was $440,000 on the date of the transaction, and had an adjusted basis to the owner, Tom, of $420,000. What is Gregs basis in the eight-unit building?

$320,000

$360,000

$400,000

$420,000

3) Gain, in certain cases, may be treated as capital gain in which of the following situations?

a. Upon recognition of a nonbusiness bad debt

b. Upon the sale of inventory

c. On the sale of Section 1231 property

d. In none of the above situations

4) Which of the following is a capital asset as defined by the Code?

a. Inventory held primarily for resale in the ordinary course of business

b. Supplies used in the ordinary course of business

c. Depreciable property and land used in a trade or business

d. Both a and b

e. None of the above is correct.

5) In October of 2017, Tommy and Tammy, husband and wife, sold for $940,000 their (only) residence that they had purchased in 1999 for $400,000 paying $300,000 in cash with a $100,000 mortgage from ABC Bank. They lived there the entire time they owned the home, and they made repairs to the electric and plumbing during their 10-year ownership totaling $40,000. What, if any, is their recognized gain or loss to be included on their jointly filed Form 1040 for 2017?

a. $400,000

b. $0

c. $500,000

d. $40,000

e. None of the above is correct.

6) Henrietta exchanged real property held for investment with a basis of $100,000 and a fair market value of $125,000 for other real property with a fair market value of $160,000 owned by Harry that Henrietta planned to hold for investment. She also transferred to Harry 100 shares of Piano, Inc. stock worth $25,000 with an adjusted basis of $15,000. Harrys basis in his property was $200,000. How much is Henriettas realized gain and her recognized gain?

a. Realized gain: $10,000; Recognized gain: $10,000

b. Realized gain: $10,000; Recognized gain: $0

c. Realized gain: $45,000; Recognized gain: $10,000

d. Realized gain: $45,000; Recognized gain: $0

7) Based on the facts in question 6, how much gain or loss is recognized by Harry?

a. Recognized gain or loss: $0

b. Recognized gain: $10,000

c. Recognized gain: $25,000

d. Recognized loss of $25,000

e. None of the above is the correct answer.