(1) Which one of the following statements is true? (2 points)

a. Section 1245 depreciation recapture carries over in a Section 1031 transaction.

b. For Section 1245 recapture to apply, accelerated depreciation must have been taken

on the property.

c. Section 1231 lookback losses may convert some or all of Section 1245 gain into

ordinary gain.

d. Section 1245 recapture may cause a Section 1231 loss to be converted to an ordinary

loss.

(2) Which one of the following statements is true? (2 points)

a. Section 1250 recapture potential does not carry over to the donee of a gift.

b. Section 1250 recapture potential carries over to the heir of an estate.

c. Section 1250 recapture potential has no tax impact on charitable contributions.

d. Section 1250 recapture is impacted by the depreciation method used.

(3) Which one of the following statements is true? (2 points)

a. An accrual basis taxpayer accepts a note receivable from a retail customer with a weak

credit rating. The taxpayer immediately sells the note to a bank for less than the notes

stated value. The taxpayer has a short-term capital loss.

b, A university professor writes a mystery novel and publishes it at his own expense. Several

years later, a national publishing company buys the copyright to the book for $345,000.

The professor has a long-term capital gain.

c. A franchise transfer is generally a sale or exchange of a capital asset.

d. Both C corporations and individuals net together their capital gains and losses.

(4) Which one of the following statements is true? (2 points)

a. Section 1231 applies to the sale or exchange of business properties but not to any

involuntary conversions.

b. If there is net Section 1231 loss, it is treated as a short-term capital loss.

c, Personal use property casualty gains and losses are not subject to the Section 1231 rules.

d. Section 1231 property includes non-personal use property where casualty losses exceed

casualty gains for the tax year.