Reference no: EM132318515

Question

1) A property that has been rented for 120 days and used for personal use for 40 days should be categorized as:

A) Primarily rental.

B) Primarily personal.

C) Personal/rental.

D) All of these are correct.

2) A property that has been rented for 180 days and used for personal use for 16 days should be categorized as:

A) primarily rental

B) primarily personal

C) personal/rental

D) all of these are correct

3) Lois and Benjamin own a chalet in New Mexico and rented it for 12 days for $6,000. The rest of the year, the chalet was used by them and their friends and family. What is the proper tax treatment of the $6,000 income?

A) none of the rental income needs to be reported as part of gross income.

B) the amount should be reported on Schedule E.

C) the amount should be reported on Schedule C.

D) the amount should be reported as other income.

4) Which of the following expense items is(are) deductible as rental expense?

A) Property taxes.

B) Depreciation.

C) Insurance.

D) All are deductible rental expenses.

5) Colin and Megan own a cabin in the Mammoth Mountains, California. During the year, they rented it for 45 days for $10,000 and used it 12 days for personal use. The expenses for the cabin included $7,000 in mortgage interest, $3,000 in property taxes, $1,200 in utilities, $400 in maintenance, and $3,000 in depreciation. What is their net income or loss from the cabin (without considering the passive loss limitation)? Use the IRS method for allocation of expenses. (Round your answer to the nearest whole number.)

A) $0.

B) $1,526 net loss.

C) $7,632 net loss.

D) $10,000 net income.

6) The like-kind exchange provisions are elective provisions. (True or False)

a) True

b) False

7) If a taxpayer trades a personal-use asset for another asset, the exchange does not qualify as a like-kind exchange. (True or False)

a) True

b) False

8) Exchange of one partnership interest for another partnership interest qualifies as a like-kind exchange. (True or False)

a) True

b) False

9) The receipt of boot in a like-kind exchange causes the recognition of a realized gain. (True or False)

a) True

b) False

10) The adjusted basis of property received in a like-kind exchange can be calculated by taking the FMV of the property received less the gain postponed (plus loss postponed).

a) True

b) False

11) On an involuntary conversion, gain is recognized to the extent of the lower of gain realized or the proceeds not used for replacement. (True or False)

a) True

b) False