R3 - Memory

Question 1

HE:Homeowners exclusion qualification

Answer 1

must have owned and used the property as a principal residence TWO years or more during the FIVE year period ending on the date of the sale or exchange by the tax payer. Periods of ownership use do not have to be continuous. EITHER spouse must meet the ownership requirement but both spouses must meet the USE requirement.

Question 2

HE:homeowners exclusion limits

Answer 2

MFJ and certain surviving spouse - 500K

Single, MFS, and head of household - 250K

Question 3

HE:Surviving spouse - homeowners exclusion

Answer 3

entitled to the full 500K provided house sold within two years of death

Question 4

HE:Hardship provision - if you do not meet ownership test

Answer 4

number of months of qualifying over 24 months

The original exclusion is multiplied by this amount

Question 5

HE:Reduced homeownership exclusion- Non qualified use

Answer 5

If you rent the house that is unqualified use , Period of rent over 4 years * gain will be included in your income

Question 6

HE:hardship vs non qualified use

Answer 6

total exclusion vs gain

Question 7

IC: Involuntary conversions ( replacement prop must serve the same function

Answer 7

Only taxed on the amount not reinvested

Question 8

IC: Basis of the new asset

Answer 8

Old basis=new basis + any amount not reinvested

Question 9

IC: personal property

Answer 9

reinvestment must occur two years from year end for principal residence its four years

Question 10

IC: Condemned business property

Answer 10

reinvestment must occur Three years from year end

Question 11

IC: Condemned business property basis

Answer 11

NBV of new property-deferred gain

Question 12

IC Rules apply to gains only

Answer 12

only gains not losses

Question 13

DC: Divorce property settlement

Answer 13

Nontaxable= NBV basis

Question 14

EX : of like kind

Answer 14

like kind exchange of REAL property use in trade or business or held for investment. Note personal like kind does not qualify for non recognition treatement

Question 15

EX : of like kind

Answer 15

Make sure you know what is real property vs personal property

Question 16

EX: of like kind timing requirements

Answer 16

1. Identify within 45 days that’s it like kind AND
2. ## like kind prop must be received earlier of 180 days and tax return file date

Question 17

EX: like kind gain

Answer 17

Boot/loot +FMV of Non-likekind property RECEIVED

Question 18

EX: like kind gain

Answer 18

Gain is calculated based on the old property FV old- BV old .

Question 19

EX: like kind gain - Realized vs recognized

Answer 19

Realized = Amt realized - adj basis

Recognized : Upto Boot/Loot Plus FMV on non inkind

Question 20

EX: Like kind basis of prop received

Answer 20

• No boot , basis of prop received = basis of prop given up

- Boot, basis of prop receied = FMV of prop rec-Def gain + def losses

Question 21

EX : like kind loss

Answer 21

• Not recognized only realized. All of the loss is deferred and increases the basis of the new property

Question 22

EX : Amount realized

Answer 22

Amount realized: ( boot rec : Cash +FMV of prop rec+net relief from liability) - FMV of boot paid ( Cash +FMV of prop paid+net liability assumed)

Question 23

Installment sales

Answer 23

Taxed when payment is received otherwise deferred

Question 24

Treasury and capital stock transactions ) by corp

Answer 24

Corps are precluded from any tax benefits whether gain or loss resulting from dealing with own stock : sales of stock by corp, repurchase of stock, resissue of stock

Question 25

Wash sale loss

Answer 25

Sold for a loss and is repurchased 30 days before or after the SALE DATE

Question 26

Wash sale : basis of repurchased security

Answer 26

Purchase price + Disallowed loss

Question 27

Wash sale : date of acquisiiton

Answer 27

Purchase date of original security

Question 28

Make sure

Answer 28

you know the difference between a realized loss and a recognized loss

Question 29

Related party transactions

Answer 29

Losses are disallowed

Question 30

related party transactions

Answer 30

Basis are same as gift tax rules

Question 31

Personal loss

Answer 31

No deduction allowed on personal loss , itemized dedu may be allowed on personal casualty losses

Question 32

Character of gain or loss

Answer 32

When a tax payer disposes of property the gain or loss is classified as capital or ordinary . This depends on the nature of the asset disposed.

Question 33

Capital assets

Answer 33

Personal auto, personal furniture and fix, interest in a partnership, goodwill of a corp, personal property not used in trade or business, stocks and securities of all types ( except those held by dealers), real property not use in trade or business, copywrigts, literary, musical or artisticial comps that have been purchases, other aassets held of investments

Question 34

Reporting disposition of cap assets

Answer 34

form 8949

Question 35

Non-capital assets

Answer 35

Inventory, depre personal property used in trade or business( 1231,1245,1250) May be capital or ordinary

Question 36

non cap

Answer 36

opywrigts, literary, musical or artisticial comps that have been held by original artists ( Exception sales of music comp hely by original gets cap gains treatement)

Question 37

non-cap

Answer 37

treasury stock