Deck 16 Flashcards Preview

Regulation > Deck 16 > Flashcards

Flashcards in Deck 16 Deck (20):
1

Depreciable basis is:

Cost associated with the purchase of the asset and with getting the asset ready for its intending use

2

Definition of real property

land and all items permanently affixed to the land (e.g., buildings, paving, etc.)

3

Capital assets:

Property (real and personal) held by a taxpayer for investment

4

"Like-kind" exchange

Same type of investment; exchange of property used in the trade or business or held for investment (exception of inventory, stock, securities, real property)

5

Gain recognized is the lessor of:

Boot received or gain realized

6

Amount realized for property with no boot =

FMV of new property - adjusted basis

7

Amount realized for property with boot paid =

FMV of new property - boot - adjusted basis

8

New basis of like-kind property with boot received =

Adjusted basis of old property + gain recognized - boot received

9

Amount realized for property with boot received =

FMV of new property + boot - adjusted basis

10

What is the basis for inherited property?

FMV on the date of death

11

Section 1231 Assets

Depreciable assets and all real property used in a trade or business and held over 12 months

12

Gross profit percentage =

Gain (GP)/selling price

13

Real property

land and building

14

Personal property

machinery, equipment, and cars

15

Basic formula for determine gain or loss =

Amount received (amount realized) - adjusted basis of asset sold

16

Adjusted basis of asset sold (three kinds)

1. Purchased property
2. Gifted property
3. Inherited property

17

Adjusted basis for purchased property

Cost of the property

18

Adjusted basis for gifted property

NBV/rolleover cost; Exception: if you sell for higher then use donor's basis to determine gain, if you sell for lower then use lower FMV at date of gift, if you sell between, no gain or loss

19

A gain is not taxed if the taxpayer can "HIDE IT"

H: homeowners; I: Involuntary conversion; D: Divorce property settlement; E: Exchange of like kind; I: installment sale; T: treasury capital & stock

20

Homeowners exclusion =

$250,000 for single; $500,000 for married filing jointly