Question 1

Verway, Inc., has a 2014 net § 1231 gain of $55,000 and had a $62,000 net § 1231 loss in 2013. For 2014, Verway's net § 1231 gain is treated as:

Accepted Answer

A)   $55,000 ordinary loss.
B)   $55,000 ordinary gain.
C)   $55,000 capital loss.
D)   $55,000 capital gain.
E)   None of the above.F) A) and B)
G) A) and C)

Question 2

Individuals who are not professional real estate developers may get capital gain treatment for sale of their real property if they engage only in limited development activities.

Accepted Answer

A) True 
 B)False

Question 3

Stanley operates a restaurant as a sole proprietorship. Which of the following items are capital assets in the hands of Stanley?

Accepted Answer

A)   The restaurant's tables and chairs.
B)   A portable sound system used to play "theme music" for the restaurant.
C)   The restaurant building that is an asset of the sole proprietorship.
D)   An interest­bearing savings account used to keep the restaurant's excess cash.
E)   None of the above.F) A) and E)
G) D) and E)

Question 4

If § 1231 asset casualty gains and losses net to a gain, the gain is treated as a § 1231 gain.

Accepted Answer

A) True 
 B)False

Question 5

The subdivision of real property into lots for resale when no substantial physical improvements have been made to the property never causes the gain from sale of the lots to be treated as ordinary income.

Accepted Answer

A) True 
 B)False

Exam 14: Property Transactions: Capital Gains and Losses, 1231, and Recapture Provisions

If § 1231 asset casualty gains and losses net to a gain, the gain is treated as a § 1231 gain.

Correct Answer
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Verway, Inc., has a 2014 net § 1231 gain of $55,000 and had a $62,000 net § 1231 loss in 2013. For 2014, Verway's net § 1231 gain is treated as:

Correct Answer
verified

Stanley operates a restaurant as a sole proprietorship. Which of the following items are capital assets in the hands of Stanley?

Correct Answer
verified

The subdivision of real property into lots for resale when no substantial physical improvements have been made to the property never causes the gain from sale of the lots to be treated as ordinary income.

Correct Answer
verified

Individuals who are not professional real estate developers may get capital gain treatment for sale of their real property if they engage only in limited development activities.

Correct Answer
verified

Exam 14: Property Transactions: Capital Gains and Losses, 1231, and Recapture Provisions

If § 1231 asset casualty gains and losses net to a gain, the gain is treated as a § 1231 gain.

Correct AnswerverifiedShow Answer

Verway, Inc., has a 2014 net § 1231 gain of $55,000 and had a $62,000 net § 1231 loss in 2013. For 2014, Verway's net § 1231 gain is treated as:

Correct AnswerverifiedShow Answer

Stanley operates a restaurant as a sole proprietorship. Which of the following items are capital assets in the hands of Stanley?

Correct AnswerverifiedShow Answer

The subdivision of real property into lots for resale when no substantial physical improvements have been made to the property never causes the gain from sale of the lots to be treated as ordinary income.

Correct AnswerverifiedShow Answer

Individuals who are not professional real estate developers may get capital gain treatment for sale of their real property if they engage only in limited development activities.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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