Exam (elaborations)
ACCT 3013 EXAM 2 QUIZ QUESTIONS AND ANSWERS
- Course
- Institution
ACCT 3013 EXAM 2 QUIZ QUESTIONS AND ANSWERS....
[Show more]
Content preview
Qualifying property received in a nontaxable exchange has a cost basisfor tax purposes. - ANSWER false (qualifying property takes a
substituted basis)
A taxpayer who receives or pays boot in a nontaxable exchange must
recognize gain to the extent of the FMV of the boot. - ANSWER false
(payment of boot does not trigger gain recognition)
Signo Incorporated's current year income statement includes a $21,000
gain realized on the exchange of an old business asset for a new
business asset. If the exchange is nontaxable, Signo has a $21,000
favourable permanent book/tax difference. - ANSWER false (the
book/tax difference is temporary)
Reiter Incorporated exchanged an old forklift for new office furniture.
This exchange qualifies as a nontaxable like-kind exchange. - ANSWER
false
In a like-kind exchange in which both properties are subject to a
mortgage, both parties to the exchange are treated as receiving boot
equal to the relief of their respective mortgage. - ANSWER false (only
the amount of net debt relief is treated as boot by the party with the net
debt relief)
LiO Company transferred an old asset with a $13,600 adjusted tax basis
in exchange for a new asset worth $11,000 and $1,500 cash. Which of
the following statements is false?
A. if the exchange is taxable, LiO recognizes a $1,100 loss
B. if the exchange is nontaxable, LiO recognizes no loss
C. if the exchange is nontaxable, LiO's basis in the new asset is $12,100
D. none of these chioces are false - ANSWER None of these
statements are false.
A. (11,000+1,500)-13,600=(1,100)
, C. 11,000+1,100=1,200
Oxono Company realized a $74,900 gain on the exchange of one asset
for another asset (no cash was included in the exchange). The assets
were like-kind properties. Oxono reported the gain as revenue on its
financial statements. Which of the following is true?
(fave/unfave temp/perm) - ANSWER The exchange resulted in a
favorable temporary book/tax difference.
Mr. Weller and the Olson Partnership entered into an exchange of
investment real property. Mr. Weller's property was subject to a
$428,000 mortgage, which Olson assumed. Olson's property was
subject to a $235,000 mortgage, which Mr. Weller assumed. Which of
the following statements is true? (who paid and received what amounts
of boot?) - ANSWER Mr. Weller received $193,000 boot; Olson paid
$193,000 boot.
(428,000-235,000)=193,000
Gem Company's manufacturing facility was destroyed by a flood. The
facility's adjusted basis was $665,000, and Gem received an $850,000
insurance reimbursement. Within 18 months of the flood, Gem rebuilt the
facility at a total cost of $975,000. Which is Gem's basis in the new
facility? - ANSWER $790,000
975,000-(850,000-665,000)
Mr. Slake sold 1,580 shares of publicly traded DDL stock (tax basis
$49,240) for $40,000 cash on February 13. He paid $43,000 cash to
purchase 1,600 DDL shares on March 2. Compute Mr. Slake's loss
recognized on the February 13 sale and determine his tax basis in the
1,600 shares. - ANSWER No loss recognized; $52,240 basis
1) On January 21, 2009, Cody purchased 350 shares of Bond Co.
common stock for $25,500. On November 13, 2020, he sold the 350
shares for $7,250. On December 1, 2020, Cody purchased 350 shares
of Bond common stock for $8,000. What is Cody's basis in these
shares? - ANSWER $26,250
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Boostertips. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $11.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
80364 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now