Question 1. Gains and losses on nontaxable exchanges are deferred because the

1. Gains and losses on nontaxable exchanges are deferred because the tax law recognizes that nontaxable exchanges result in a change in the substance but not the form of the taxpayer’s relative economic position.

a. True

b. False

2. Abby exchanges an SUV that she has held for personal use plus $24,000 for a new SUV which she will use exclusively in her sole proprietorship business. This exchange qualifies for nontaxable exchange treatment.

a. True

b. False

3. In a nontaxable exchange, recognition is postponed. In a tax-free transaction, nonrecognition is permanent.

a. True

b. False

4. In a nontaxable exchange, the replacement property is assigned a carryover basis if there is a realized gain, but receives a new basis if there is a realized loss.

a. True

b. False

5. The nonrecognition of gains and losses under § 1031 is mandatory for gains and elective for losses.

a. True

b. False

6. Leonore exchanges 5,000 shares of Pelican, Inc., stock for 2,000 shares of Blue Heron, Inc., stock. Leonore’s adjusted basis for the Pelican stock is $300,000 and the fair market value of the Blue Heron stock is $350,000. Leonore’s recognized gain is $0 and her adjusted basis for the Blue Heron stock is $300,000.

a. True

b. False

7. Livestock of different sexes canqualify for like-kind exchange treatment if the livestock has been held for over 24 months.

a. True

b. False

8. To qualify as a like-kind exchange, real property must be exchanged either for other real property or for personal property with a statutory life of at least 39 years.

a. True

b. False

.

9. The exchange of unimproved real property located in Topeka (KS) for improved real property located in Atlanta (GA) does not qualify as a like-kind exchange.

a. True

b. False

10.Lola owns land as an investor. She exchanges the land for a warehouse which she leases to a tenant who uses it to store his business inventory. The exchange does qualify for like-kind exchange treatment.

a. True

b. False

.

11.A building located in Virginia (used in business) exchanged for a building located in France (used in business) cannotqualify for like-kind exchange treatment.

a. True

b. False

12.Pat owns a 1965 Mustang car which he uses for personal use. He purchased it four years ago for $22,000, and it currently is worth $27,000. He exchanges it for a 1979 Triumph Spitfire convertible worth $27,000. Pat’s recognized gain is $0 and his adjusted basis for the convertible is $22,000.

a. True

Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.