Transactions in Property

Question 1

The amount paid for property in cash, or the FMV of other property, plus expenses connected with the purchase (i.e. abstract of title fees, installation, legal fees, recording fees, and any amount hte buyer agrees to pay that the seller owes)

Answer 1

Cost (of property)

Question 2

Property inherited from a decedent is always treated as this, regardless of how long it was held

Answer 2

Long term capital asset

Question 3

An exchange of business or investment property for property of the same class
-Does not apply to personal use property, inventory, stocks, bonds, etc.)

Answer 3

Like-kind exchange

Question 4

Money or property given not of a like-kind; includes any liabilities assumed on either or both sides of hte exchange

Answer 4

Boot

Question 5

Occurs when money or other property is received for property that has been destroyed, damaged, stolen, or condemned

Answer 5

Involuntary converstion

Question 6

The capital gains of this type of stock is excludable up to 50% for noncorporate taxpayers if the stock was held for more than 5 years and was acquired directly at original issuance

Answer 6

Qualified Small Business Stock (QSBS)

Question 7

An individual or C corp may elect to roll over an otherwise curringly taxable capital gain from the sale of publicly traded securities if hte sale proceeds are used to purchase common stock or a partnership interest in one of these, (if witthin 60 days of sale)

Answer 7

Small Business investment company

Question 8

Occurs when stock or securities are sold at a loss and within 30 days before or after the sale, substantially identical stock or securities in the same corp are purchased

• -Losses not deductible, but added to basis of new stock
• Rules do not apply to gains

Answer 8

Wash sales

Question 9

Results from the sale or exchange of capital assets

Answer 9

Capital gains/losses

Question 10

A type of assets that includes investment property and property held for personal use and specifically excludes property held in normal course of business

Answer 10

Capital assets

Question 11

Offset capital losses, with any remaining included in gross income

Answer 11

Capital gains

Question 12

Depreciable and nondepreciable property used in atrade or business and held for more than one year

Answer 12

Section 1231 property

Question 13

Generally depreciable personal property used in a trade or business or held for hte production of income (ex. machinery, equipment, trucks, autos)

Answer 13

Section 1245 property

Question 14

The gain from the sale or exchange of Sec. 1245 property must be reported as ordinary income to hte extent of the lesser of (1) all depreciation, or (2) the recognized gain

Answer 14

Section 1245 recapture

Question 15

Any real property (ex. building) that is not Sec 1245 property and is subject to the allowance of depreciation

Answer 15

Section 1250 property

Question 16

The gain from the sale or exchange of Sec. 1250 property must be reported as ordinary income ot the extent that actual depreciation deductions exceeded what straight-line would have been

Answer 16

Sec 1250 recapture

Question 17

Requires that the amount of ordinary income on the disposition of Sec 1250 property by corporations be increased by 20% of the additional amount that would have been ordinary income if hte property had instead been Sec. 1245 property

Answer 17

Sec. 291

Question 18

Tax form for Sales and Other Dispositions of Capital Assets

Answer 18

Form 8949