Multiple choice

William sold Section 1245 property for $25,000 in 2011. The property cost $35,000 when it was purchased 5 years ago. The depreciation claimed on the property was $16,000.
Calculate the amount of ordinary income under Section 1245.
A.$9,000
B.$35,000
C.$0
D.$16,000
E.$6,000
F.None of the choices.
G.$19,000

William sold Section 1245 property for $25,000 in 2011. The property cost $35,000 when it was purchased 5 years ago. The depreciation claimed on the property was $16,000.
Calculate the 1231 gain.
A.$9,000
B.$6,000
C.None of the choices.
D.$19,000
E.$16,000
F.$0
G.$35,000

Carey exchanges real estate for other real estate in a qualifying like-kind exchange. Carey’s basis in the real estate given up is $110,000, and the property has a fair market value of $170,000. In exchange for her property, Carey receives real estate with a fair market value of $100,000 and cash of $20,000. In addition, the other party to the exchange assumes a mortgage loan on Carey’s property of $50,000.
Calculate Carey’s basis in the property received.
A.None of the choices.
B.$70,000
C.$100,000
D.$60,000
E.$0
F.$50,000

In 2011, Mary sells for $15,000 a machine used in her business. The property was purchased on May 1, 2005, at a cost of $12,500. Mary has claimed depreciation on the machine $4,750.
What is the amount and nature of Mary's gain as a result of the sale of the machine?
A. $7,250 Section 1231 gain
B. $7,250 ordinary income under Section 1245
C. $2,500 ordinary income and $4,750 Section 1231 gain
D. $2,500 Section 1231 gain and $4,750 ordinary income under Section 1245
E. None of the above

During 2011, Paul sells for $300,000 residential property which he acquired in 1993 for $150,000. Paul has claimed straight-line depreciation on the building $57,525.
What is the amount and nature of Paul's gain on the sale of the rental property?
A.$207,525 Section 1231 gain
B.$150,000 Section 1231 gain, $57,525 "unrecaptured depreciation"
C.$167,400 Section 1231 gain, $57,525 ordinary income
D.$190,125 Section 1231 gain, $17,400 "unrecaptured depreciation"
E.None of the above

Jeanie acquires an apartment building in 1991 for $260,000 and sells it for $500,000 in 2011. At the time of sale, there is $78,000 of accumulated straight-line depreciation on the apartment building. Assuming Jeanie is in the highest tax bracket for ordinary income, how much of her gain is taxed at 25 percent?
A.None
B. $240,000
C. $318,000
D. $162,000
E. $78,000

Virginia has a casualty gain of $5,000, and a casualty loss of $2,500, before reduction by the $100 floor. The gain and loss were the result of two separate casualties, and both properties were personal-use assets.
What is Virginia's gain or loss as a result of these casualties?
A. $5,000 capital gain and $2,500 capital loss
B. $5,000 capital gain and $2,400 itemized deduction, subject to the 10 percent of adjusted gross income limitation
C. $5,000 capital gain and $2,500 itemized deduction, subject to the 10 percent of adjusted gross income limitation
D. $5,000 capital gain and $2,400 capital loss
E. None of the above

Pat sells real estate for $30,000 cash and a $120,000 5-year note. If her basis in the property is $90,000 and she receives only the $30,000 down payment in the year of sale, how much is Pat’s taxable gain in the year of sale using the installment sales method?
A. $60,000
B. $30,000
C. $15,000
D. $12,000
E. $0

What is Sarajane's basis in the equipment received in the exchange described in Question 10 assuming her basis in the equipment given up was $12,000?
A. $0
B. $12,000
C. $14,000
D. $15,000
E. None of the above

Oscar sells his residence of the last 10 years in January 2011 for $190,000. Oscar's basis in the residence is $45,000, and his selling expenses are $11,000.
If Oscar does not buy a new residence, what is the taxable gain on the sale of his residence?
A. $145,000
B. $134,000
C. $45,000
D. $9,000
E. $0

Gene purchased a home 18 months ago for $350,000. If Gene sells his house due to unforeseen circumstances for $550,000 after living in it for the full 18 months, what is his taxable gain?
A.$0
B.$12,500
C.$50,000
D.$200,000

William sold Section 1245 property for $25,000 in 2011. The property cost $35,000 when it was purchased 5 years ago. The depreciation claimed on the property was $16,000.
Calculate the recomputed basis of the property.
A.None of the choices.
B.$16,000
C.$35,000
D.$19,000
E.$5,000
F.$0
G.$9,000