1. Ross Inc. exchanged their building located in New York City with an adjusted basis of $750,000 for a building located in New Jersey with a fair market value of $900,000. No cash was given in this exchange. What is the basis of the new building on the books of Ross Inc.?

		$750,000
		$900,000
		$800,000
		$0

2. What is the maximum postponed gain for the replacement property for the following involuntary conversion?

Amount realized: $400,000

Adjusted basis: $300,000

Amount reinvested: $450,000

		$100,000
		$400,000
		$450,000
		$0

3. Mark had a $6,000 long term capital loss in 2021. He had no other capital gain or loss transactions. How much can he deduct against ordinary income in 2021?

		$0
		$6,000
		$4,000
		$3,000

4. FDA Which of the following items is a capital asset for tax purposes?

		Machinery used in a trade or business.
		Building used in a trade or business.
		Land used in a trade or business.
		IBM stock held by a taxpayer for investment.

5. Arnold purchased an apartment building on Dec. 14, 2021, for $1,200,000. The land was assessed to be $200,000. How much depreciation can he claim in 2021 on this building? (Please use the table in the text on page 8-35 Exhibit 8.8)

		$0
		$1,520
		$1,000,000
		$1,200,000

6. Sharon and Gray file a joint tax return and have $750,000 of taxable income in 2021. They had $50,000 of long-term capital gains. At what tax rate will they be taxed on their long-term capital gains?

		Ordinary income rates
		15%
		20%
		25%

7. In 1986, Roberto received land worth $32,000. The donor's adjusted basis was $35,000. Roberto sold the land for $95,000 in 2021. What is his recognized gain on the sale of the land?

		$0
		$95,000
		$60,000
		$35,000

8. Ronald purchased a computer on March 4, 2021, for $3,200 for use in his accounting practice. How much can he deduct in 2021?

		$3,200
		$1,600
		$640
		$0

9. Mark exchanged real estate on March 15, 2021, with the following information:

Adjusted basis of old asset: $10,000

Cash boot received: $1,000

Fair market value of new asset: $11,000

How much gain does Mark recognize on the exchange?

		$0
		$10,000
		$1,000

10. What is the maximum postponed gain for the replacement property for the following involuntary conversion?

Amount realized: $400,000

Adjusted basis: $300,000

Amount reinvested: $450,000

		$100,000
		$400,000
		$450,000
		$0 11. Which of the following items is a capital asset for tax purposes? Machinery used in a trade or business Building used in a trade or business Land used in a trade or business IBM stock held by a taxpayer for investment