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