Civil Law Questions

Metro City Mall requires its tenants to sign a lease that includes a clause releasing Metro from liability in the event of monetary or physical injury no matter who is at fault. Coco's Chocolate Creations signs a lease with the mall that contains the clause. This is​

Residential real property is not like-kind with residential real property

A loss realized for property detroyed in a hurricane is deferred under the involuntary conversion ruels

For corporations, 291 recaptures 20% of the lesser of depreciation taken or the realized gain as ordinary income

Ordinary gains and losses are obtained on the sale of investments

The adjusted basis is the initial basis less cost recovery deductions

Winchester LLC sold the following business assets during the current year: (1) automobile, $30,000 cost basis, $12,000 depreciation, $20,000 proceeds; (2) machinery, $25,000 cost basis, $20,000 depreciation, $10,000 proceeds; (3) furniture, $15,000 cost basis, $10,000 depreciation, $4,000 proceeds; (4) computer equipment, $25,000 cost basis, $6,000 depreciation, $10,000 proceeds; (5) Winchester had unrecaptured §1231 losses of $3,000 in the prior five years. What are the amount and character of Winchester's gains and losses before the §1231 netting process? Assume all assets were held for more than one year.

Ashburn reported a $104,775 net §1231 gain in Year 6. Assuming Ashburn reported $50,500 of nonrecaptured §1231 losses during Years 1 to 5, what amount of Ashburn's net §1231 gain for Year 6, if any, is treated as ordinary income?

Assets held for investment and personal use assets are examples of capital assets

Sumner sold equipment that it uses in its business for $30,000. Sumner bought the equipment a few years ago for $80,000 and has claimed $40,000 of depreciation expense. Assuming that this is Sumner's only disposition during the year, what is the amount and character of Sumner's gain or loss?

The 1231 look back rule applies whether there is a net gain or loss

The sale for more than the original cost basis (before depreciation) of machinery used in a trade or business and held for more than one year results in which of the following types of gain or loss?

1231 assets include all assets used in a trade or business

Boot is not like-kind property involved in a like-kind exchange

Arlington LLC exchanged land used in its business for some new land. Arlington originally purchased the land it exchanged for $28,000. The new land had a fair market value of $35,000. Arlington also received $2,000 of office equipment in the transaction. What is Arlington's recognized gain or loss on the exchange?

Alpha sold machinery that it used in its business to Beta, a related entity, for $40,000. Beta used the machinery in its business. Alpha bought the machinery a few years ago for $50,000 and has claimed $30,000 of depreciation expense. What is the amount and character of Alpha's gain?

The gain or loss realized on the sale of an asset is always recognized for tax purposes

Brad sold a rental house that he owned for $250,000. Brad bought the rental house five years ago for $225,000 and has claimed $50,000 of depreciation expense. What is the amount and character of Brad's gain or loss?

1250 recaptures as ordinary income, the excess of accelerated depreciation over straight-line depreciation on real property, but generally no longer applies under current law

Which of the following is true regarding depreciation recapture