5.Quidik Corporation sold a machine for $80,000 that it had acquired three years ago for $68,000. If its adjusted basis when sold was $50,000, what should Quidik report on its tax return as a result of this sale?

a.Section 1245 recapture of $18,000; Section 1231 gain of $30,000;

b.Ordinary income = $12,000 and Section 1231 gain = $18,000

c.Section 1245 recapture = $18,000 and Section 1231 = $12,000;

d.Section 1231 gain = $38,000

e.None of the above

10. Dennis exchanges business realty with a $50,000 adjusted basis for $5,000 cash and new business realty with a $48,000 FMV. What is the amount of gain recognized on the exchange?

a.$0

b.$2,000

c.$3,000

d.$5,000

e.None of the above.

11.Matthew owns a warehouse that is used in business while Pamela owns land. Matthew exchanges the warehouse for the land, which will be held for investment. The FMV of the warehouse is $200,000 (basis $120,000) and the warehouse is subject to a mortgage of $40,000, which is assumed by Pamela. Matthew receives $10,000 cash and the land, which has a FMV of $150,000 (basis of $130,000 to Pamela). Pamela must recognize a gain of

a.$ -0-.

b.$ 20,000.

c.$ 60,000.

d.$ 70,000.

e.None of the above.

16.Acme, a C corporation, sold a warehouse bought in 1990 for $890,000 during the current year.The building cost $800,000 and the corporation had claimed $320,000 of straight-line depreciation. How much should this C corporation report as section 1231 gain?

a.$64,000

b.$320,000

c.$346,000

d.$410,000

e.None of the above.