QUESTION 64

Oscar sells a business truck in 2018 for a gain of $25,000, The truck had been held 3 years and accumulated $5,000 of prior depreciation at the time it was sold. This is the only transaction for this year, and Oscar has not realized any other gains or losses for at least 6 years, As a result Oscar will have a:

		Long Term Capital Gain of $25,000
		Ordinary Gain of $25,000
		Long Term Capital Gain of $20,000, Ordinary Gain of $5,000
		Long Term Capital Gain of $5000, Ordinary Gain of $20,000.
		None of the above

QUESTION 66

Mary sells her personal use automobile for $29,000. She purchased the car two years ago for $22,000 and has made no capital improvements and suffered no losses on the car. What is Marys reportable income from the sale?

		$12,000
		$7,000
		$3,000
		zero
		None of the above

QUESTION 69

Smith exchanges a factory with an adjusted basis of $250,000 for another factory of like kind with a fair market value of $1.8 million. Smith's basis in the new factory will be:

		$200,000
		$250,000
		$1,800,000
		$1,550,000
		None of the above

QUESTION 70

Joe owns a seaplane which he uses in his business of transporting people from NYC to the Hamptons. The seaplane's adjusted basis is $250,000. It is completely destroyed by fire when its value was $350,000. Insurance pays Joe $310,000 which he uses to purchase another seaplane for use in his business 3 months after the loss for $325,000. As a result, Joe has an adjusted basis in the new seaplane of:

		$325,000
		$265,000
		A gain of $350,,000
		Zero

QUESTION 73

Sydney's factory is destroyed by fire causing a $10,000 loss. In the same year he sells a long-term trade or business asset for a $90,000 gain. There is no depreciation recapture potential on any of the transactions, and there have been no other dispositions during the past five year. As a result Sydney will report

		$10,000 ordinary loss, 90,000 long-term capital gain
		10,000 long-term capital loss and 90,000 long-term capital gain
		$10,000 ordinary loss and 90,000 ordinary gain
		Zero gain or loss
		None of the above

QUESTION 75

The Investment interest expense deduction is deductible:

		in full when paid
		limited to net investment income
		limited to portfolio income
		limited to passive income
		None of the above