15/06/2023d12:54 Chapterd13d-dTestdBankd-
dtestdbank
CHAPTERd 13
PropertydTransactions:dDeterminationdofdGaindordLoss,dBasisdConsiderations,dandd Nonta
xabledExchanges
1473.dRealizeddgaindordlossdisdmeasureddbydtheddifferencedbetweendthedamountdrealized
d fromdthedsaledordotherddispositiondofdpropertydanddthedproperty’sdadjusteddbasisdatdthe
ddated ofddisposition.
*a.dTrue
b.dFalse
1474.dMolandadsellsdadparceldofdlanddford$18,000dindcashdanddthedbuyerdassumesd Mol
anda’sdmortgagedofd$12,000dondthedland.dMolanda’sdamountdrealizeddisd$18,000.
a. True
*b.dFalse
1475.dIfdWal-
Martdstockdincreasesdindvaluedduringdthedtaxdyeardbyd$4,500,dthedamountd realizeddisdad
positived$4,500.
a. True
*b.dFalse
1476.dIfdthedbuyerdassumesdthedseller’sdliabilitydondthedpropertydacquired,dthedseller’sd
amountdrealizeddisdincreaseddbydthedamountdofdthedliabilitydassumed.
*a.dTrue
b. False
1477.dThedfairdmarketdvaluedofdpropertydreceiveddindadsaledordotherddispositiondisdthedp
riced atdwhichdpropertydwilldchangedhandsdbetweendadwillingdsellerdanddadwillingdbuyer
dwhend neitherdisdcompelleddtodselldordbuy.
*a.dTrue
b.dFalse
1478.dIfdadsellerdassumesdthedbuyer’sdliabilitydondthedpropertydacquired,dthedbuyer’sd ad
justeddbasisd fordthedpropertyd isddecreasedd byd thedamountdofdthed liabilitydassumed.
*a.dTrue
b.dFalse
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dtestdbank
CHAPTERd 13
PropertydTransactions:dDeterminationdofdGaindordLoss,dBasisdConsiderations,dandd Nonta
xabledExchanges
1479.dExpendituresdmadedfordordinarydrepairsdandd maintenancedofdpropertydarednotdadd
edd todthedoriginaldbasisdindtheddeterminationdofdthedproperty’sdadjusteddbasisdwhereasd
capitald expendituresdaredaddeddtodthedoriginaldbasis.
*a.dTrue
b.dFalse
1480.d Louisdpurchasesdlanddanddandofficedbuildingd fordhisd businessd ford $150,000d with
$50,000dbeingdallocateddtodthed land.dDuringdthed firstd year,d Louisddeductsdcostdrecoverydof
$2,247.dLouis’dadjusteddbasisdfordthedbuildingdatdthedenddofdthedfirstdyeardisd$97,753d (
$100,000d–d$2,247).
*a.dTrue
b.dFalse
1481.dThedadjusteddbasisdofdpropertydthatdisdstolendisdreduceddbydthedamountdofdinsura
nced proceedsdreceiveddanddbydanydrecognizeddloss.
*a.dTrue
b.dFalse
1482.dMonroe’sddeliverydtruckdisddamageddindandaccident.dMonroe’sdadjusteddbasisdfordth
ed deliverydtruckdpriordtodthedaccidentdisd$20,000.dIfdMonroedreceivesdinsurancedproceedsd
of
$21,000danddrecognizesdadcasualtydgaindofd$1,000,dhisdadjusteddbasisdfordtheddeliverydtruc
kd afterdthedaccidentdisd$21,000.
a. True
*b.dFalse
1483.dIfdinsurancedproceedsdaredreceiveddfordpropertyduseddindadtradedordbusiness,dad ca
sualtydtransactiondcandresultdindrecognizeddgaindordrecognizeddloss.
*a.dTrue
b. False
1484.dIfdthedamountdofdadcorporateddistributiondisdlessdthandthedamountdofdthedcorpor
ated earningsdanddprofits,dthedreturndofdcapitaldconceptddoesdnotdapplydanddthedshareh
olders’d adjusteddbasisdfordthedstockdremainsdunchanged.
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dtestdbank
CHAPTERd 13
PropertydTransactions:dDeterminationdofdGaindordLoss,dBasisdConsiderations,dandd Nonta
xabledExchanges
*a.dTrue
b.dFalse
1485.dRickydownsdalldthedstockdofdAmethyst,dInc.d(adjusteddbasisdofd$72,000).dIfdhed re
ceivesdad distributiond fromdAmethystd ofd $65,000dandd corporated earningsdandd profitsd are
$15,000,dRickydhasdadcapitaldgaindofd$7,000danddandadjusteddbasisdfordhisdAmethystdsto
ckd ofd$0.
a. True
*b.dFalse
1486.dThedamountdofdadcorporateddistributiondqualifyingdfordcapitaldrecoverydtreatment
d whichdexceedsdthedrecipient’sdstockdbasisdisdtreateddasdandordinarydgain.
a. True
*b.dFalse
1487.dThedadjusteddbasisdfordadtaxabledbonddpurchaseddatdadpremiumdisdreduceddifd
thed amortizationdelectiondisdmade.dThedamountdofdthedamortizeddpremiumdisdtreate
ddasdand interestddeduction.
*a.dTrue
b. False
1488.dGingerdpurchasesdad$1,000dcorporatedbonddatdadpremiumdofd$100danddelectsdtod
amortizedthedpremium.dOndthedlaterdsaledofdthedbonddford$1,090,dshedhasdamortizedd$3
0dofd thedpremium.dGingerdhasdadrecognizeddgaindofd$120d($1,090damountdrealizedd–
d$970d adjusteddbasis).
a. True
*b.dFalse
1489.dThedamountdreceiveddfordadutilitydeasementdondlanddisdincludeddindthedgrossdinco
med ofdthedtaxpayer.
a. True
*b.dFalse
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dtestdbank
CHAPTERd 13
PropertydTransactions:dDeterminationdofdGaindordLoss,dBasisdConsiderations,dandd Nonta
xabledExchanges
1490.dAdrealizeddgaindondthedsaledordexchangedofdadpersonaldusedassetdisdrecognized,db
utdad realizeddlossdondthedsale,dexchange,dordcondemnationdofdadpersonaldusedassetdisdn
otd recognized.
*a.dTrue
b. False
1491.dAdrealizeddgaindwhosedrecognitiondisdpostponeddresultsdindthedtemporarydrecoverydo
fd moredthandthedtaxpayer’sdcostdordotherdbasis.
*a.dTrue
b.dFalse
1492.dAdrealizeddlossdwhosedrecognitiondisdpostponeddresultsdindthedtemporarydrecoverydo
fd moredthandthedtaxpayer’sdcostdordotherdbasis.
a. True
*b.dFalse
1493.dAsdcompensationdfordherdservices,dLesliedpurchasesdrealdestatedfromdherdemploy
erd fordlessdthandfairdmarketdvalue.dLeslie’sdbasisdfordthedrealdestatedisditsdfairdmarketd
value.
*a.dTrue
b. False
1494.dWhendadtaxpayerdhasdpurchaseddseveraldlotsdofdstockdonddifferentddatesdatddiffere
ntd purchasedpricesdanddcannotdidentifydthedlotdofdstockdthatdisdbeingdsold,dhedshoulddus
edad weighteddapproach.
a. True
*b.dFalse
1495.dCassiedpurchasesdadsoledproprietorshipdford$125,000.dThedfaird marketdvaluedofdt
hed tangibledassetsdisd$100,000danddthedagreeddtodvaluedofdgoodwilldisd$15,000.dAssu
mingd theredarednodotherdintangibledassets,dCassie’sdbasisdfordthedtangibledassetsdisd$10
8,696d ($100,000d+d$8,696)danddherdbasisdfordthedgoodwilldisd$16,304d($15,000d+d$1,
304).
a. True
*b.dFalse
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dtestdbank
CHAPTERd 13
PropertydTransactions:dDeterminationdofdGaindordLoss,dBasisdConsiderations,dandd Nonta
xabledExchanges
1473.dRealizeddgaindordlossdisdmeasureddbydtheddifferencedbetweendthedamountdrealized
d fromdthedsaledordotherddispositiondofdpropertydanddthedproperty’sdadjusteddbasisdatdthe
ddated ofddisposition.
*a.dTrue
b.dFalse
1474.dMolandadsellsdadparceldofdlanddford$18,000dindcashdanddthedbuyerdassumesd Mol
anda’sdmortgagedofd$12,000dondthedland.dMolanda’sdamountdrealizeddisd$18,000.
a. True
*b.dFalse
1475.dIfdWal-
Martdstockdincreasesdindvaluedduringdthedtaxdyeardbyd$4,500,dthedamountd realizeddisdad
positived$4,500.
a. True
*b.dFalse
1476.dIfdthedbuyerdassumesdthedseller’sdliabilitydondthedpropertydacquired,dthedseller’sd
amountdrealizeddisdincreaseddbydthedamountdofdthedliabilitydassumed.
*a.dTrue
b. False
1477.dThedfairdmarketdvaluedofdpropertydreceiveddindadsaledordotherddispositiondisdthedp
riced atdwhichdpropertydwilldchangedhandsdbetweendadwillingdsellerdanddadwillingdbuyer
dwhend neitherdisdcompelleddtodselldordbuy.
*a.dTrue
b.dFalse
1478.dIfdadsellerdassumesdthedbuyer’sdliabilitydondthedpropertydacquired,dthedbuyer’sd ad
justeddbasisd fordthedpropertyd isddecreasedd byd thedamountdofdthed liabilitydassumed.
*a.dTrue
b.dFalse
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dtestdbank
CHAPTERd 13
PropertydTransactions:dDeterminationdofdGaindordLoss,dBasisdConsiderations,dandd Nonta
xabledExchanges
1479.dExpendituresdmadedfordordinarydrepairsdandd maintenancedofdpropertydarednotdadd
edd todthedoriginaldbasisdindtheddeterminationdofdthedproperty’sdadjusteddbasisdwhereasd
capitald expendituresdaredaddeddtodthedoriginaldbasis.
*a.dTrue
b.dFalse
1480.d Louisdpurchasesdlanddanddandofficedbuildingd fordhisd businessd ford $150,000d with
$50,000dbeingdallocateddtodthed land.dDuringdthed firstd year,d Louisddeductsdcostdrecoverydof
$2,247.dLouis’dadjusteddbasisdfordthedbuildingdatdthedenddofdthedfirstdyeardisd$97,753d (
$100,000d–d$2,247).
*a.dTrue
b.dFalse
1481.dThedadjusteddbasisdofdpropertydthatdisdstolendisdreduceddbydthedamountdofdinsura
nced proceedsdreceiveddanddbydanydrecognizeddloss.
*a.dTrue
b.dFalse
1482.dMonroe’sddeliverydtruckdisddamageddindandaccident.dMonroe’sdadjusteddbasisdfordth
ed deliverydtruckdpriordtodthedaccidentdisd$20,000.dIfdMonroedreceivesdinsurancedproceedsd
of
$21,000danddrecognizesdadcasualtydgaindofd$1,000,dhisdadjusteddbasisdfordtheddeliverydtruc
kd afterdthedaccidentdisd$21,000.
a. True
*b.dFalse
1483.dIfdinsurancedproceedsdaredreceiveddfordpropertyduseddindadtradedordbusiness,dad ca
sualtydtransactiondcandresultdindrecognizeddgaindordrecognizeddloss.
*a.dTrue
b. False
1484.dIfdthedamountdofdadcorporateddistributiondisdlessdthandthedamountdofdthedcorpor
ated earningsdanddprofits,dthedreturndofdcapitaldconceptddoesdnotdapplydanddthedshareh
olders’d adjusteddbasisdfordthedstockdremainsdunchanged.
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dtestdbank
CHAPTERd 13
PropertydTransactions:dDeterminationdofdGaindordLoss,dBasisdConsiderations,dandd Nonta
xabledExchanges
*a.dTrue
b.dFalse
1485.dRickydownsdalldthedstockdofdAmethyst,dInc.d(adjusteddbasisdofd$72,000).dIfdhed re
ceivesdad distributiond fromdAmethystd ofd $65,000dandd corporated earningsdandd profitsd are
$15,000,dRickydhasdadcapitaldgaindofd$7,000danddandadjusteddbasisdfordhisdAmethystdsto
ckd ofd$0.
a. True
*b.dFalse
1486.dThedamountdofdadcorporateddistributiondqualifyingdfordcapitaldrecoverydtreatment
d whichdexceedsdthedrecipient’sdstockdbasisdisdtreateddasdandordinarydgain.
a. True
*b.dFalse
1487.dThedadjusteddbasisdfordadtaxabledbonddpurchaseddatdadpremiumdisdreduceddifd
thed amortizationdelectiondisdmade.dThedamountdofdthedamortizeddpremiumdisdtreate
ddasdand interestddeduction.
*a.dTrue
b. False
1488.dGingerdpurchasesdad$1,000dcorporatedbonddatdadpremiumdofd$100danddelectsdtod
amortizedthedpremium.dOndthedlaterdsaledofdthedbonddford$1,090,dshedhasdamortizedd$3
0dofd thedpremium.dGingerdhasdadrecognizeddgaindofd$120d($1,090damountdrealizedd–
d$970d adjusteddbasis).
a. True
*b.dFalse
1489.dThedamountdreceiveddfordadutilitydeasementdondlanddisdincludeddindthedgrossdinco
med ofdthedtaxpayer.
a. True
*b.dFalse
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dtestdbank
CHAPTERd 13
PropertydTransactions:dDeterminationdofdGaindordLoss,dBasisdConsiderations,dandd Nonta
xabledExchanges
1490.dAdrealizeddgaindondthedsaledordexchangedofdadpersonaldusedassetdisdrecognized,db
utdad realizeddlossdondthedsale,dexchange,dordcondemnationdofdadpersonaldusedassetdisdn
otd recognized.
*a.dTrue
b. False
1491.dAdrealizeddgaindwhosedrecognitiondisdpostponeddresultsdindthedtemporarydrecoverydo
fd moredthandthedtaxpayer’sdcostdordotherdbasis.
*a.dTrue
b.dFalse
1492.dAdrealizeddlossdwhosedrecognitiondisdpostponeddresultsdindthedtemporarydrecoverydo
fd moredthandthedtaxpayer’sdcostdordotherdbasis.
a. True
*b.dFalse
1493.dAsdcompensationdfordherdservices,dLesliedpurchasesdrealdestatedfromdherdemploy
erd fordlessdthandfairdmarketdvalue.dLeslie’sdbasisdfordthedrealdestatedisditsdfairdmarketd
value.
*a.dTrue
b. False
1494.dWhendadtaxpayerdhasdpurchaseddseveraldlotsdofdstockdonddifferentddatesdatddiffere
ntd purchasedpricesdanddcannotdidentifydthedlotdofdstockdthatdisdbeingdsold,dhedshoulddus
edad weighteddapproach.
a. True
*b.dFalse
1495.dCassiedpurchasesdadsoledproprietorshipdford$125,000.dThedfaird marketdvaluedofdt
hed tangibledassetsdisd$100,000danddthedagreeddtodvaluedofdgoodwilldisd$15,000.dAssu
mingd theredarednodotherdintangibledassets,dCassie’sdbasisdfordthedtangibledassetsdisd$10
8,696d ($100,000d+d$8,696)danddherdbasisdfordthedgoodwilldisd$16,304d($15,000d+d$1,
304).
a. True
*b.dFalse
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