Reference no: EM132571046

Questions -

Q1. On January 1 of the current year, Jack Robins purchased a small shopping center at a cost of $1.5 million. On September 17, Jack sold the shopping center for $1.8 million. Jack claimed $45,000 of depreciation for the period in which he owned the property. Jack should report

a. $45,000 of ordinary income and $300,000 of capital gain.

b. $45,000 Sec. 1231 gain and a $300,000 capital gain.

c. $300,000 of ordinary income and $45,000 of capital gain.

d. $345,000 Sec. 1231 gain

Q2. Jim Price sold a machine used in his business for $30,000. The machine cost Jim $50,000, and he had properly claimed accelerated depreciation totaling $20,000. Additionally, Jim had claimed a $10,000 Sec. 179 expense when the asset was purchased. Straight-line depreciation would have been $12,000. What is the amount of gain that should be reported under Secs. 1231 and 1245 (recapture)?

a. $0 $10,000

b. $0 $8,000

c. $2,000 $8,000

d. $10,000 $0

Q3. Jason owns a 55% capital interest in ABC Partnership. His brother owns 60% interest in XYZ Partnership. ABC sold a piece of property with an adjusted basis of $50,000 and a fair market value of $55,000 to XYZ for $45,000. What is ABC's recognized loss?

a. $0

b. $5,000

c. $5,500

d. $10,000