Please answer the MC questions to the best of your knowledge . 1. Which of the following is how gain or loss realized is calculated? A. Cash less selling costs. B. Cost basis less cost recovery. C. Cash less cost recovery. D. Amount realized less adjusted basis. E. None of these.

2. Leesburg sold a machine for $2,200 on November 10th of the current year. The machine was purchased for $2,600. Leesburg had taken $1,200 of depreciation deductions on the machine through the date of the sale. What is Leesburg's gain or loss realized on the machine? A. $800 gain.

B. $1,000 gain. C. $1,200 loss. D. $1,400 loss. E. None of these.

3. The sale of land held for investment results in the following type of gain or loss? A. Capital.

B. Ordinary. C. 1231. D. 1245. E. None of these.

4. The sale of machinery at a loss that was used in a trade or business and held for more than one year results in the following type of loss? A. Capital. B. 291. C. 1231. D. 1245. E. None of these. 5. The sale of machinery for more than the original cost basis (before depreciation), used in a trade or business, and held for more than one year results in the following types of gain or loss? A. Capital and Ordinary. B. Ordinary only. C. Capital and 1231. D. 1245 and 1231. E. None of these. 6. Which of the following results in an ordinary gain or loss? A. Sale of a machine at a gain. B. Sale of stock held for investment. C. Sale of a 1231 asset. D. Sale of inventory. E. None of these. 7. Which of the following gains does not result solely in an ordinary gain or loss? A. Sale of equipment held for less than a year. B. Sale of inventory. C. Sale of equipment where the gain realized exceeds the accumulated depreciation. D. Sale of equipment where the accumulated depreciation exceeds the gain realized. E. None of these. 8. Which of the following is not a 1245 asset if held for more than one year? A. Machinery. B. Automobile. C. Building purchased in 1985 for which accelerated depreciation was elected. D. Land. E. None of these