q1 Which of the following is not true about capital assets a Real property used in a trade or business is not a capital asset b Shares of stock held for investment are capital assets c Individual taxpayers may deduct net capital losses of up to $3,000 per year d Capital losses may be carried back for 3 years to offset capital gains in those years e Net long term capital gains are granted preferential tax treatment q2 Which of the following is a capital asset a Inventory held by a manufacturer b All property owned by a taxpayer other than property specifically noted in the law as an exception c Accounts receivable held by a dentist d Depreciable property and real estate used in a trade or business q3 If property is inherited by a taxpayer, a At sale date, the recipient will not have a gain or loss even if the recipient has held the property for more than a year b To the recipient, the basis for the property is the same as the basis to the decedent c In general, the basis to the recipient is the fair market value at the decedent's date of death d At sale date, the basis of the property to the recipient differs depending on whether the property was sold at a gain or a loss q4 Karen has a net operating loss in 2018 If she does not make any special elections, what is the first year to which Karen can carry the net operating loss a 2015 b 2019 c 2020 d 2017 e 2016 q5 Which of the following can be used to offset a passive loss a Dividend income from stock held as an investment b Pension income c Passive income such as income from a limited partnership d Active income such as wages e All of choices are correct but Active income such as wages q6 Arnold purchased two rental properties 6 years ago He actively participates in their management During 2018, Arnold had income of $22,000 from one of the rentals He had a loss from the other rental of $32,000, as well as salary income of $35,000, and dividend income of $2,000 What is Arnold's net passive income or loss deduction a $10,000 net loss b $32,000 net loss c $8,000 net loss d $22,000 net loss e None of these choices are correct q7 Selma owns a beach cottage that she rents to tourists In the current year she rented the cottage for 90 days What is the maximum number of days Selma can use the cottage before her expense deduction will be limited to her gross rental income a 0 days b 18 days c 14 days d 9 days

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q1 Which of the following is not true about capital assets? a. Real property used in a trade or business is not a capital asset.

Which of the following is not true about capital assets?

a. Real property used in a trade or business is not a capital asset.

b. Shares of stock held for investment are capital assets.

c. Individual taxpayers may deduct net capital losses of up to $3,000 per year.

d. Capital losses may be carried back for 3 years to offset capital gains in those years.

e. Net long-term capital gains are granted preferential tax treatment.

Which of the following is a capital asset?

a. Inventory held by a manufacturer

b. All property owned by a taxpayer other than property specifically noted in the law as an exception

c. Accounts receivable held by a dentist

d. Depreciable property and real estate used in a trade or business

If property is inherited by a taxpayer,

a. At sale date, the recipient will not have a gain or loss even if the recipient has held the property for more than a year.

b. To the recipient, the basis for the property is the same as the basis to the decedent.

c. In general, the basis to the recipient is the fair market value at the decedent's date of death.

d. At sale date, the basis of the property to the recipient differs depending on whether the property was sold at a gain or a loss.

Karen has a net operating loss in 2018. If she does not make any special elections, what is the first year to which Karen can carry the net operating loss?

a. 2015

b. 2019

c. 2020

d. 2017

e. 2016

Which of the following can be used to offset a passive loss?

a. Dividend income from stock held as an investment

b. Pension income

c. Passive income such as income from a limited partnership

d. Active income such as wages

e. All of choices are correct but "Active income such as wages".

Arnold purchased two rental properties 6 years ago. He actively participates in their management. During 2018, Arnold had income of $22,000 from one of the rentals. He had a loss from the other rental of $32,000, as well as salary income of $35,000, and dividend income of $2,000. What is Arnold's net passive income or loss deduction?

a. $10,000 net loss

b. $32,000 net loss

c. $8,000 net loss

d. $22,000 net loss

e. None of these choices are correct.

Selma owns a beach cottage that she rents to tourists. In the current year she rented the cottage for 90 days. What is the maximum number of days Selma can use the cottage before her expense deduction will be limited to her gross rental income?

a. 0 days

b. 18 days

c. 14 days

d. 9 days