Questions 1 through 10 are True False questions. (2 points each for a total of 20 points)

• A gain from the sale of a principal residence may not be recognized.
• The term like-kind refers to the nature or character of property, not its grade or quality.
• Receipt of boot in a like kind exchange may cause the recognition of gain.
• Investment property can be exchanged for business property in a like-kind exchange.
• A realized loss from involuntary conversion will always be recognized.
• The basis of gift property is increased by the full amount of gift tax paid by the donor.
• Generally speaking, a sale of a personal use asset cannot result in a deductible loss.
• The basis of property is increased by capital returns and decreased by capital expenditures.
• Not all realized gains and losses are recognized.
• The amount realized from a sale includes the amount of liabilities from which the seller is relieved.