QUESTION 4

1. If the taxpayer qualifies under section 1033 (nonrecognition of gain from an involuntary conversion) and the amount reinvested in replacement property exceeds the amount realized, the basis of the replacement property is:

   		The cost of the replacement property.
   		The adjusted basis of the involuntarily converted property.
   		The cost of the replacement property minus the postposed gain.
   		The cost of the replacement property plus the excess of the reinvestment over the amount realized from the involuntary conversion.
   		None of the above.

QUESTION 12

1. Oscar inherited 100 acres of land on the death of his father in 2007. A Federal estate tax return was filed and the land was valued at $300,000 (its fair market value at the date of the death). The father had originally acquired the land in 1964 for $19,000 and prior to his death had made permanent improvements of $6,000. What is Oscars basis in the land?

   		$19,000.
   		$25,000.
   		$300,000.
   		$325,000.
   		None of the above.

QUESTION 14

1. Oscar has adjusted gross income of $100,000 in 2020. During the year he spends $35,000 for surgery to replace his hip, and 8,000 for surgery to make his nose more attractive. He receives insurance reimbursement for the hip surgery of 10,000. As result, Oscar can deduct:

   		15,000
   		25,000
   		35,000
   		43,000
   		none of the above

QUESTION 15

1. The adjusted basis of property is reduced by both the amount of insurance proceeds received and any allowable loss from a casualty or theft.

   True

   False

1 points

QUESTION 16

1. Under the At-Risk limitation:

   		deductions for losses from an activity are limited to the extent the taxpayer is at-risk
   		losses that are disallowed due to at-risk limitation are carried forward until the at-risk amount is increased, or the property is disposed of.
   		At-risk limitations must be computed for each activity of the taxpayer separately
   		all of the above
   		None of the above.

QUESTION 19

1. Adam Exchanges a shoe factory, Fair Market Value 280,000. and Adjusted Basis of 100,000, which is subject ot a Mortgage of 70, 000 for Brads shoe factory which has a Fair Market Value of 500,000 and is subject to a mortgage of 310,000 and 20,000 in cash. Each party assumes the mortgage on the property they are receiving in the exchange; Adams Gain Recognized is:

   		180,000
   		20,000
   		500,000
   		zero
   		None of the above

QUESTION 32

1. Sam operates a variety store as a sole proprietorship. Which of the following items are capital assets in the hands of Sam?

   		The vacant lot next to his store that was purchased for use as a parking lot for his customers.
   		Sixteen bicycles that have been in his inventory for over a year.
   		A note receivable that was given to him by a customer in payment of the balance due on the customers account at the store.
   		Publicly traded stock in which Sam invested some of the stores excess cash.
   		None of the above