Question 1. As part of the divorce agreement, Tyler transfers his ownership int

1. As part of the divorce agreement, Tyler transfers his ownership interest in their personal residence to Lupe. The house had been jointly owned by Tyler and Lupe and the adjusted basis is $520,000. At the time of the transfer to Lupe, the fair market value is $800,000. What is the recognized gain to Tyler, and what is Lupe’s basis for the house?

a. $0 and $520,000.

b. $0 and $800,000.

c. $140,000 and $520,000.

d. $280,000 and $800,000.

e. None of the above.

2. Which of the following statements is correctwith respect to § 1044 (rollover of publicly traded securities gain into specialized small business investment companies)?

a. Section 1044 provides for permanent exclusion of gain.

b. To qualify under § 1044, the proceeds must be reinvested within one year of the sale.

c. The amount realized must be reinvested in the common stock or partnership interest of a specialized small business investment company.

d. Only b. and c. are correct.

e. None of the above.

3. Which of the following might motivate a taxpayer to try to avoid like-kind exchange treatment?

a. Taxpayer has unused NOL carryovers.

b. Taxpayer has unused general business credit carryovers.

c. Taxpayer has suspended or current passive activity losses.

d. Only a. and b. are correct.

e. a., b., and c. are correct.

4. Robert sold his ranch which was his principal residence during the current taxable year. At the date of the sale, the ranch had an adjusted basis of $460,000 and was encumbered by a mortgage of $200,000. The buyer paid him $500,000 in cash, agreed to take the title subject to the $200,000 mortgage, and agreed to pay him $100,000 with interest at 6 percent one year from the date of sale. How much is Robert’s realized gain on the sale?

5. Ken is considering two options for selling land for which he has an adjusted basis of $100,000 and on which there is a mortgage of $80,000. Under the first option, Ken will sell the land for $225,000 with a stipulation in the sales contract that he liquidate the mortgage before the sale is complete. Under the second option, Ken will sell the land for $145,000 and the buyer will assume the mortgage. Calculate Ken’s recognized gain under both options.

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6. Annette purchased stock on March 1, 2014, for $200,000. At December 31, 2014, it was worth $210,000. She also purchased a bond on September 1, 2014, for $20,000. At year end, it was worth $15,000. Determine Annette’s realized

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