Mr. Smith's business warehouse was demolished by a tornado on August 10, 2018. On November 14, 2018, Mr. Smith received $90,000.00 in insurance proceeds covering the damage to the warehouse. Mr. Smiths basis in the warehouse was $50,000.00. He purchased a new warehouse on February 5, 2019 for $70,000.00.

12. What is the latest date for Mr. Smith to make an election under $1033 and defer recognition of the gain?

a.. December 31, 2020

b. November 10, 2009

c. December 31, 2021

d. None of the above

13 If Mr. Smith makes the proper election pursuant to

1033, what is Mr. Smith's recognized gain?

a. $10,000.00 gain

b. $20,000.00 gain

c. $5,000.00 gain

d . none of the above

14. Alicia buys a beach house for $300,000 which she uses as her personal vacation home. She builds an additional room on the house for $25,000. She sells the property for

$600,000 and pays $20,000 in legal fees in connection with the sale. What is her recognized gain or loss on the sale of the house?

• $0
• $80,000
• $255,000
• $99,000
• None of the above

15. Kent gave Larry a gift having a fair market value of $133,000.00 on February 14, 2018. Kent had purchased the gift property in 2016 for $153,000.00. Larry sold the gift on February 20, 2015 for $145,000What is Larry's gain?

• No gain or loss
• $120,000.00
• $98,000.00
• $108,000.00

e. $133,000.00

16. Tom Tanner had long term capital gains of $15,000 and long term capital losses of $5,000 for 2019. He also had short term capital losses of $2,000. What was his net capital gain/ loss for the year?

• $0
• $ 8,000 net long term capital gain
• $8,000 net short term capital gain
• $5,000 ordinary income

e. None of the above

17. At a graduation present Barbara received 1,000.00 shares of stock from her aunt. The stock has a fmv of $25,000.00 at the time of the gift. The aunt's adjusted basis in the stock at the time of the gift was $30,000.00. Barbara sold the stock in the following year for $22,000.00. What is Barbara's gain or loss on the sale?

a. $3,000 loss

b. No gain or loss

c. $1,200 gain

d. $1,667.00 gain

e. $4,000.00 gain

18. Section 1033 is an example of a non-recognition provision.

• True
• False

19. Alicia purchased a tract of land for $140,000 in 2012 when she heard a new highway was going to be constructed through the property and that the land would soon be worth $200,000. Highway engineers surveyed the property and indicated that she would probably get $180,000. The highway project was abandoned in 2019 and the value of the land fell to $100,000. What is the amount of loss Alicia can claim in 2019?

a. $0.

b. $60,000.

c. $80,000.

d. $100,000.

e. None of the above.

20. In order to qualify for a like-kind exchange under Section 1031, which of the following requirements must be met?

a . The form of the transaction is an exchange.

b . Both the property transferred and the property received are held either for productive use in a trade or business or for investment

c . The exchange must be contain foreign real estate.

d . Only a and b

e . a, b, and c