TXX5768

1)Which of the following statements is false?

	A.	Wall to wall carpeting installed in an office building is deemed a structural part of the building because it is permanently affixed to the floor of the building and is not readily removable.
	B.	The distinction between structural components of a building and personal property has remained troublesome and often is a matter of dispute between taxpayers and the IRS.
	C.	One factor that is used to distinguish personal property from realty is whether the item is permanently affixed to the land or readily movable or designed to be moved.
	D.	The tax code transforms a cash basis taxpayer into essentially an accrual basis taxpayer for purposes of determining the amount of real estate taxes that are deductible in the year real estate is purchased or sold.

2)Which of the following statements is true?

	A.	The purpose of the residual method of allocating a lump sum purchase price for multiple assets is to prevent amounts paid for amortizablegoodwill to be allocated to long-lived assets such as depreciable buildings.
	B.	One of the main purposes of the residual method of allocating costs is to determine the amount of the purchase price that is allocable to goodwill and going concern value.
	C.	A group of assets purchased for a lump sum constitutes a trade or business sale if more than one class of assets is included in the sale price (e.g. realty and personal property).
	D.	If real estate is sold as part of a sale of a complete trade or business (going-concern), the residual method of allocating the purchase price among the assets acquired is NOT required since the taxpayer may use any "reasonable method" to allocate the purchase price among the assets purchased.
	E.	All the above statements are false.