Ch 14 - Federal/State Taxes Flashcards
Which property type can be depreciated?
An apartment building
A gain is considered taxable when the property:
is sold.
California state income tax brackets and the standard deduction are adjusted each year based upon the:
California Consumer Price Index.
To qualify for an exclusion from capital gain on a residential property, the homeowner must:
have both owned and occupied the property for two of the previous five years.
All of the following are considered capital improvements or expenditures when determining adjusted basis, EXCEPT:
replacing a broken window.
These are capital improvements:
remodeling a kitchen.
adding a bedroom.
installing an automatic sprinkler system.
A net gain on an asset is the amount:
- subject to capital gain taxation.
- remaining after capital losses are deducted from capital gains.
Both 1 and 2
The term boot is used as a factor for which one of the following?
Exchanging
If less than 100% of the sales price is received in the year of sale, the tax code considers it to be:
an installment sale.
Which one of the following would not be considered a like-kind property exchange under an IRS 1031 tax-deferred exchange?
A four-plex for a primary residence
Which depreciation method is being used when an equal portion of a structure’s value is deducted each year?
Straight line
Sean O’Brien just sold his personal residence for $185,000. His adjusted basis is $170,000. He will pay 6% of the sales price in brokerage fees and $3,500 in closing costs. For federal income tax purposes, what is the amount of Sean’s capital gain?
$400
Cost recovery is a term most closely related to:
depreciation
Under current law, a qualified taxpayer can exclude the entire gain on the sale of their principal residence up to __________ if filing a single return.
$250,000
