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1) Antonio owns land held for investment with a basis of $28,000

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1) Antonio owns land held for investment with a basis of $28,000. The city of Lafayette exercises the right of eminent domain and Antonio receives a payment of $48,000. What is Antonio's realized gain?

A.  $0

B.  $20,000

C.  $28,000

D.  $48,000

 

2) In April 2009 of this year, Emma acquired a machine for $50,000 for use in her business. The machine is classified as 7-year property. Emma elects out of bonus depreciation and does not expense the asset under Sec. 179. Emma's depreciation on the machine this year is

A.  $5,000.

B.  $7,145.

C.  $10,000.

D.  $50,000.

 

3) During the current year, a corporation sells equipment for $300,000 that it had purchased and placed in service in 2007. The equipment cost $270,000, and $60,000 of depreciation deductions was allowed. The results of the sale are

A.  ordinary income of $90,000.

B.  Sec. 1231 gain of $90,000.

C.  ordinary income of $60,000 and LTCG of $30,000.

D.  ordinary income of $60,000 and Sec. 1231 gain of $30,000.

 

4) Susie owns a ranch in Wyoming, which Pat offers to purchase. Susie is not willing to sell the ranch but is willing to exchange the ranch for an apartment complex in Louisiana. The complex is available for sale. Pat purchases the apartment complex in Louisiana from Jody and transfers it to Susie in exchange for Susie's ranch. The ranch and the complex each have a $1,000,000 fair market value. Which of the following is true?

A.  The transaction qualifies as a like-kind exchange for Pat but not for Susie.

B.  The transaction qualifies as a like-kind exchange for both Pat and Susie.

C.  The transaction qualifies as a like-kind exchange for Susie but not for Pat.

D.  The transaction does not qualify as a like-kind exchange for either Pat or Susie.

 

5) A married person who files a separate return can claim a personal exemption for his or her spouse if the spouse is not the dependent of another and has

A.  gross income that is less than the personal exemption.

B.  adjusted gross income that is less than the personal exemption.

C.  no gross income.

D.  no taxable income.