Mod 36: Property Transactions Key Areas Flashcards Preview

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Flashcards in Mod 36: Property Transactions Key Areas Deck (12):
1

What is the recognized gain on involuntary conversions?

Lesser of...2

1 realized gain

2 amount not reinvested

2

How do you calculate the new basis in involuntary conversions?

Cost of new property
- gain not recognized

3

When a loss is incurred on an involuntary conversion, it is...

Recognized immediately

4

New basis for new home purchased when you used principal residence deduction of $250,000

Cost of new home
- gain not recognized ($250,000)

5

How do you calculate new basis in a like kind exchange? 4

Old basis of property given up
+ gain recognized
+ boot paid
- boot received

6

Section 1231, applies if 2 characteristics exist

1 personal or real property used in trade or business

2 held for more than 1 year

7

Real property 2 examples

Land, real estate

8

Section 1245, 2

1 Depreciation of sec. 1231 property

2 treated as ordinary income

9

Recapture

Ordinary income

10

Corporations who sell real estate, what are the recapture rules? 2

1 Sec. 291

2 20% of depreciation is recaptured as ordinary income

11

If 1231 gains and losses are netted and produce a 1231 gain, what is the treatment of the income?

Treated as capital gain

12

If 1231 gains and losses are netted and produce a 1231 loss, what is the treatment of the income?

Ordinary loss

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