Day 10

Question 1

How is Section 1244 loss treated?

Answer 1

Treated as Ordinary Loss NOT Capital Loss

MCQ-08215

Question 2

How are Non-business bad debt treated?

Answer 2

Short Term Capital Loses

MCQ-15832

Question 3

What is the capital loss treatment for business?

Answer 3

Carry back 3 years and carry forward 5 years

NO ($3,000) loss = Only Individuals

MCQ-06728

Question 4

Recapture Rule: Ordinary Income

Answer 4

Is recognized to the extent of the lesser of the amount of gain realized OR the depreciation taken/allowed

MCQ-02202

Question 5

Section 1245 recapture Rule:

Answer 5

The lesser of depreciation taken or gain recognized = recapture

MCQ-05974

Question 6

Realized Gain =

Answer 6

Selling price/Proceeds less Adjusted Basis

MCQ-05975

Question 7

What type of property is Office Furniture?

Answer 7

Section 1245

MCQ-05975

Question 8

Section 1250 Gain is recognized to the extent of _________?

Answer 8

Straight-line accumulated depreciation

MCQ-08965

Question 9

How is revenue reported under the installment method?

Answer 9

Revenue is reported in the year cash payments are received. The amount of cash received is multiplied by the gross profit percentage.

Gross Profit Percentage = Gain Realized ÷ Sales Price

MCQ-06005

Question 10

Amount Realized =

Answer 10

Cash to be received + Debt Assumed by buyer - Selling Expenses

MCQ-14659

Question 11

Amount Realized - Adjusted Basis =

Answer 11

Gain Realized/Gross Profit

MCQ-14659

Question 12

Under related party transaction rules how is stock treated when owned by the taxpayers sister?

Answer 12

Stock owned by the taxpayers family members (including brothers, sisters, spouses, parents, ancestors, and lineal descendents) is treated as if it is constructively owned by the taxpayers.

Add % of ownership of all family members together

MCQ-06604