Reference no: EM132752817

Question: 1. Martina owns 100 shares of Bangor Corporation common stock at the beginning of the year, with a basis of $16,500. During the year, Bangor declares and pays a 10% nontaxable stock dividend. What is Martina's basis for each of the shares received?

2. Birdco sold a building for $600,000 and received a down payment of $120,000 as well as annual principal payments of $120,000 for each of the subsequent four years. Birdco had purchased the building for $500,000 and claimed depreciation totaling $80,000 during its ownership of the building. What amount of gain should Birdco report on its federal income tax return in the year of sale using the installment method?

3. Steve is a single taxpayer. What requirements must he satisfy under IRC §121 to be eligible to elect to exclude gain on the sale or exchange of his principal residence?

4. Would the receipt of boot in a transaction otherwise qualifying as a like-kind exchange always cause the exchange to be at least partially taxable?

5. Duckworth, Inc. purchases the following assets during the year:

Computer $ 3,000

Computer desk 1,000

Office furniture 10,000

Delivery van 25,000

What should be reported as the cost basis for MACRS five-year property?

6. What conditions must be satisfied for a taxpayer to expense, in the year of purchase, under Internal Revenue Code Section 179, the cost of new or used tangible depreciable personal property?