Research in Federal Taxation

15. Code Sec. 1231 is a gainMoss characterization provision which provides the taxpayer with the best of both tax worlds. This is a. net Section 1231 gains and losses are taxed as capital gains, and are not subject recapture. b. net Section 1231 gains and losses are taxed as income, but are subject to recapture. c. net Section 1231 gains are taxed as capital gains, and net losses are taxed as ordinary losses, but gains are not subject to recapture. d. net Section 1231 gains are taxed as capital gains, and net losses are taxed as ordinary losses, but are subject to recapture. 16. Pursuant to which code section may a taxpayer seek to recover the additional tax paid on an amount included in income under claim of right, but which was required to be repaid in a lower tax year? 1341. b. Code Sec. 482. c. Code Sec. 471. d. Code Sec. 61. 17. Code Sec. 469 limits the deductibility of losses for activities in which a. the taxpayer actively participates. b. the taxpayer does not materially participate. c. the taxpayer is an investor. d. None of the above. 18 During 2011, Zeke and Alice, a mamied couple, decided to sell their which had a basis of $150,000. They had owned and occupied the residence for 20 years. They sold the house in May for S750,000. Broker's commissions and other selling expenses amounted to $60,000. They purchased a new residence in July for $300,000. What is the recognized gain and the adjusted basis of the new residence? a. $0 and $300,000 b. $40,000 and S300,000. c. $290,000 and $300,000. d. $690,000 and S300,000 e. None of the above. 19. The holding of Duberstein v Commissioner, stands for the following proposition: a. A gift for income tax purposes is the same as for gift tax purposes. b. A gift for income tax purposes is motivated out of detached and disinterested generosity, love, affection, charity or like impulses, thus is not likely to be found in a business setting. c. A gift made in the business setting is always deductible by the donor. d. None of the above. 20. The Internal Revenue Code contains three general categories of currently deductible expenses including the following: a. Expenses incurred in a trade or business, expenses incumed for the production of income, and expenses incurred for personal living. b. Capital expenditures, expenses incurred in a trade or business, and expenses incumed for the production of income. c. Expenses incurred in a trade or business, expenses incumed for the production ofincome, and Code authorized personal expenditures. d. Expenses incurred in a trade or business, expenses incurred for the production of income, and expenses incurred for the production of tax-exempt income