TXX 5769
Final Exam
December 7, 2015
Please
insert your answers directly into the exam in the spaces provided. (You may use
more space than provided!) Your completed exam isdue by 11 p.m. on December 12.The
entire exam should be uploaded by clicking on the Test Three icon.
Any
reference to the Code is to the Internal Revenue Code of 1986, as amended.
There
are 2 essay questions (with multiple parts to each) requiring concise answers. Essay
One is worth a maximum total of 21 points (7 partswith a maximum of 3 points
each) and Essay Two is worth a maximum
total of 12 points (3 parts with a maximum of 4 points each).
Please
answer each of the following questions.
In addition to choosing the correct answer, please concisely explain why
the chosen answer is correct, what primary sources and what secondary sources you
used in reaching your conclusion. Please be specific and advise as to which of
the tax service databases you used and what materials in the database assisted
you in reaching your conclusion.
Essay
One
Part 1 –
Bob owned a duplex used as rental property. The duplex had an adjusted basis to Bob of
$86,000 and a fair market value of $300,000.
Bob transferred the duplex to his brother, Carl, in exchange for a
triplex that Carl owned. The triplex had
an adjusted basis to Carl of $279,000 and a fair market value of $300,000. Two months after the exchange, Carl sold the
duplex to his business associate to whom he was not related for $312,000. How much, if any, was Bob’s recognized gain
or loss with respect to these transactions?
a. No gain or loss is
recognized.
b. $11,000 gain is
recognized.
c. $214,000 gain is
recognized.
d. The transfer by Bob to Carl
is a gift.
e. $21,000.
Letter answer: _____
Explanation:
Part 2. What Code Section
or Sections govern the result in part 1?
a. Code Sections 1015 and
2503.
b. Code Sections 61 and 707.
c. Code Sections 318 and
1001.
d. None of the above, and
the two governing sections are discussed in the short essay below.
Letter Answer: ____
Explanation:
Part 3. Bob owned a duplex
used as rental property. The duplex had
an adjusted basis to Bob of $86,000 and a fair market value of $300,000. Bob transferred the duplex to his brother,
Carl, in exchange for a triplex that Carl owned. The triplex had an adjusted basis to Carl of
$279,000 and a fair market value of $300,000.
Two months after the exchange, Carl sold the duplex to his business
associate to whom he was not related for $312,000. How much, if any, gain or loss did Carl
recognize with respect to the transaction with Bob?
a. No gain or loss was recognized.
b. $21,000 gain was
recognized.
c. The transfer by Bob to
Carl was a gift.
d. None of the above is
correct.
Letter Answer: ____
Explanation:
Part 4. Bob owned a duplex used as rental property. The duplex had an adjusted basis to Bob of
$86,000 and a fair market value of $300,000.
Bob transferred the duplex to his brother, Carl, in exchange for a
triplex that Carl owned. The triplex had
an adjusted basis to Carl of $279,000 and a fair market value of $300,000. Two months after the exchange, Carl sold the
duplex to his business associate to whom he was not related for $312,000. How much, if any, gain or loss did Carl
recognize with respect to the sale by Carl two months after the transaction
with Bob?
a. No gain or loss was
recognized.
b. $11,000 gain was
recognized.
c. $12,000 gain was recognized.
d. None of the above.
Letter Answer: ____
Explanation:
Part 5. Assume the same
facts as in Part 4, except that Carl sold the duplex to the business associate
more than two years after the exchange with Bob. Without taking into consideration any changes
to the adjusted basis of the property subsequent to the exchange with Bob (such
as for depreciation), how much, if any, gain or loss did Bob recognize with
respect to the exchange with Carl?
a. No gain or loss was
recognized.
b. $11,000 gain was
recognized.
c. $214,000 gain was recognized.
d. The transfer by Bob to
Carl is a gift.
e. $21,000.
Letter Answer: ____
Explanation:
Part 6. Under the facts of Part
5, what is Bob’s basis in the triplex?
a. $86,000.
b. $279,000.
c. $300,000.
d. $312,000.
Letter Answer: ____
Explanation:
Part 7. Assume the same
facts as in part 6, except that Carl sold the duplex to his business associate
more than two years after the exchange with Bob. Without taking into consideration any changes
to the adjusted basis of the property subsequent to the exchange with Bob (such
as for depreciation), how much, if any, isCarl’s recognized gain with respect
to these transactions?
a. No gain or loss on the
exchange with Bob, and $12,000 gain on
the subsequent sale.
b. $11,000 gain on the
exchange with Bob, and $12,000 gain on the subsequent sale.
c. $12,000 gain on the
exchange with Bob, and $279,000 on the subsequent sale.
d. None of the above.
Letter Answer: ____
Explanation:
Essay Two
Part 1. Bobby and
Bobbi were married in 2000 and in October 2015, they sold for $450,000 theirprincipal residence that they had purchased
in 2004 for $200,000. The property was owned by them as tenants by the entirety.
They made major capital improvements during their 10-year ownership totaling
$40,000. What Code Section is applicable
to the amount of gain recognized, and what, if any, is their recognized gain?
a. $250,000; Code
Section 1014.
b. $210,000; Code
Sections61 and 1001.
c. $-0-; Code
Section 1034.
d. $-0-; Code Section 121.
e. None of the
above
Letter Answer: ____
Explanation:
Part 2. Suppose
instead that in the preceding problem (part 1) Bobby and Bobbi sold their home for
$800,000. They moved into a smaller home costing $250,000. How much gain must
they recognize?
a. $560,000.
b. $500,000.
c. $310,000.
d. $60,000.
e. None of the
above.
Letter Answer: ____
Explanation:
Part 3. Assume
instead that Bobby and Bobbi resided in a neighborhood where the values had
gone way down, and the home purchased in 2004 for $200,000 (capital
improvements of $40,000) was sold for only $110,000. How much loss is deductible
on their 2015 Form 1040?
a. $200,000.
b. $130,000.
c. $90,000.
d. $-0-
e. None of the
above.
Letter Answer: ____
Explanation:
TXX 5769
Final Exam
December 7, 2015
Please
insert your answers directly into the exam in the spaces provided. (You may use
more space than provided!) Your completed exam isdue by 11 p.m. on December 12.The
entire exam should be uploaded by clicking on the Test Three icon.
Any
reference to the Code is to the Internal Revenue Code of 1986, as amended.
There
are 2 essay questions (with multiple parts to each) requiring concise answers. Essay
One is worth a maximum total of 21 points (7 partswith a maximum of 3 points
each) and Essay Two is worth a maximum
total of 12 points (3 parts with a maximum of 4 points each).
Please
answer each of the following questions.
In addition to choosing the correct answer, please concisely explain why
the chosen answer is correct, what primary sources and what secondary sources you
used in reaching your conclusion. Please be specific and advise as to which of
the tax service databases you used and what materials in the database assisted
you in reaching your conclusion.
Essay
One
Part 1 –
Bob owned a duplex used as rental property. The duplex had an adjusted basis to Bob of
$86,000 and a fair market value of $300,000.
Bob transferred the duplex to his brother, Carl, in exchange for a
triplex that Carl owned. The triplex had
an adjusted basis to Carl of $279,000 and a fair market value of $300,000. Two months after the exchange, Carl sold the
duplex to his business associate to whom he was not related for $312,000. How much, if any, was Bob’s recognized gain
or loss with respect to these transactions?
a. No gain or loss is
recognized.
b. $11,000 gain is
recognized.
c. $214,000 gain is
recognized.
d. The transfer by Bob to Carl
is a gift.
e. $21,000.
Letter answer: _____
Explanation:
Part 2. What Code Section
or Sections govern the result in part 1?
a. Code Sections 1015 and
2503.
b. Code Sections 61 and 707.
c. Code Sections 318 and
1001.
d. None of the above, and
the two governing sections are discussed in the short essay below.
Letter Answer: ____
Explanation:
Part 3. Bob owned a duplex
used as rental property. The duplex had
an adjusted basis to Bob of $86,000 and a fair market value of $300,000. Bob transferred the duplex to his brother,
Carl, in exchange for a triplex that Carl owned. The triplex had an adjusted basis to Carl of
$279,000 and a fair market value of $300,000.
Two months after the exchange, Carl sold the duplex to his business
associate to whom he was not related for $312,000. How much, if any, gain or loss did Carl
recognize with respect to the transaction with Bob?
a. No gain or loss was recognized.
b. $21,000 gain was
recognized.
c. The transfer by Bob to
Carl was a gift.
d. None of the above is
correct.
Letter Answer: ____
Explanation:
Part 4. Bob owned a duplex used as rental property. The duplex had an adjusted basis to Bob of
$86,000 and a fair market value of $300,000.
Bob transferred the duplex to his brother, Carl, in exchange for a
triplex that Carl owned. The triplex had
an adjusted basis to Carl of $279,000 and a fair market value of $300,000. Two months after the exchange, Carl sold the
duplex to his business associate to whom he was not related for $312,000. How much, if any, gain or loss did Carl
recognize with respect to the sale by Carl two months after the transaction
with Bob?
a. No gain or loss was
recognized.
b. $11,000 gain was
recognized.
c. $12,000 gain was recognized.
d. None of the above.
Letter Answer: ____
Explanation:
Part 5. Assume the same
facts as in Part 4, except that Carl sold the duplex to the business associate
more than two years after the exchange with Bob. Without taking into consideration any changes
to the adjusted basis of the property subsequent to the exchange with Bob (such
as for depreciation), how much, if any, gain or loss did Bob recognize with
respect to the exchange with Carl?
a. No gain or loss was
recognized.
b. $11,000 gain was
recognized.
c. $214,000 gain was recognized.
d. The transfer by Bob to
Carl is a gift.
e. $21,000.
Letter Answer: ____
Explanation:
Part 6. Under the facts of Part
5, what is Bob’s basis in the triplex?
a. $86,000.
b. $279,000.
c. $300,000.
d. $312,000.
Letter Answer: ____
Explanation:
Part 7. Assume the same
facts as in part 6, except that Carl sold the duplex to his business associate
more than two years after the exchange with Bob. Without taking into consideration any changes
to the adjusted basis of the property subsequent to the exchange with Bob (such
as for depreciation), how much, if any, isCarl’s recognized gain with respect
to these transactions?
a. No gain or loss on the
exchange with Bob, and $12,000 gain on
the subsequent sale.
b. $11,000 gain on the
exchange with Bob, and $12,000 gain on the subsequent sale.
c. $12,000 gain on the
exchange with Bob, and $279,000 on the subsequent sale.
d. None of the above.
Letter Answer: ____
Explanation:
Essay Two
Part 1. Bobby and
Bobbi were married in 2000 and in October 2015, they sold for $450,000 theirprincipal residence that they had purchased
in 2004 for $200,000. The property was owned by them as tenants by the entirety.
They made major capital improvements during their 10-year ownership totaling
$40,000. What Code Section is applicable
to the amount of gain recognized, and what, if any, is their recognized gain?
a. $250,000; Code
Section 1014.
b. $210,000; Code
Sections61 and 1001.
c. $-0-; Code
Section 1034.
d. $-0-; Code Section 121.
e. None of the
above
Letter Answer: ____
Explanation:
Part 2. Suppose
instead that in the preceding problem (part 1) Bobby and Bobbi sold their home for
$800,000. They moved into a smaller home costing $250,000. How much gain must
they recognize?
a. $560,000.
b. $500,000.
c. $310,000.
d. $60,000.
e. None of the
above.
Letter Answer: ____
Explanation:
Part 3. Assume
instead that Bobby and Bobbi resided in a neighborhood where the values had
gone way down, and the home purchased in 2004 for $200,000 (capital
improvements of $40,000) was sold for only $110,000. How much loss is deductible
on their 2015 Form 1040?
a. $200,000.
b. $130,000.
c. $90,000.
d. $-0-
e. None of the
above.
Letter Answer: ____
Explanation:
TXX 5769
Final Exam
December 7, 2015
Please
insert your answers directly into the exam in the spaces provided. (You may use
more space than provided!) Your completed exam isdue by 11 p.m. on December 12.The
entire exam should be uploaded by clicking on the Test Three icon.
Any
reference to the Code is to the Internal Revenue Code of 1986, as amended.
There
are 2 essay questions (with multiple parts to each) requiring concise answers. Essay
One is worth a maximum total of 21 points (7 partswith a maximum of 3 points
each) and Essay Two is worth a maximum
total of 12 points (3 parts with a maximum of 4 points each).
Please
answer each of the following questions.
In addition to choosing the correct answer, please concisely explain why
the chosen answer is correct, what primary sources and what secondary sources you
used in reaching your conclusion. Please be specific and advise as to which of
the tax service databases you used and what materials in the database assisted
you in reaching your conclusion.
Essay
One
Part 1 –
Bob owned a duplex used as rental property. The duplex had an adjusted basis to Bob of
$86,000 and a fair market value of $300,000.
Bob transferred the duplex to his brother, Carl, in exchange for a
triplex that Carl owned. The triplex had
an adjusted basis to Carl of $279,000 and a fair market value of $300,000. Two months after the exchange, Carl sold the
duplex to his business associate to whom he was not related for $312,000. How much, if any, was Bob’s recognized gain
or loss with respect to these transactions?
a. No gain or loss is
recognized.
b. $11,000 gain is
recognized.
c. $214,000 gain is
recognized.
d. The transfer by Bob to Carl
is a gift.
e. $21,000.
Letter answer: _____
Explanation:
Part 2. What Code Section
or Sections govern the result in part 1?
a. Code Sections 1015 and
2503.
b. Code Sections 61 and 707.
c. Code Sections 318 and
1001.
d. None of the above, and
the two governing sections are discussed in the short essay below.
Letter Answer: ____
Explanation:
Part 3. Bob owned a duplex
used as rental property. The duplex had
an adjusted basis to Bob of $86,000 and a fair market value of $300,000. Bob transferred the duplex to his brother,
Carl, in exchange for a triplex that Carl owned. The triplex had an adjusted basis to Carl of
$279,000 and a fair market value of $300,000.
Two months after the exchange, Carl sold the duplex to his business
associate to whom he was not related for $312,000. How much, if any, gain or loss did Carl
recognize with respect to the transaction with Bob?
a. No gain or loss was recognized.
b. $21,000 gain was
recognized.
c. The transfer by Bob to
Carl was a gift.
d. None of the above is
correct.
Letter Answer: ____
Explanation:
Part 4. Bob owned a duplex used as rental property. The duplex had an adjusted basis to Bob of
$86,000 and a fair market value of $300,000.
Bob transferred the duplex to his brother, Carl, in exchange for a
triplex that Carl owned. The triplex had
an adjusted basis to Carl of $279,000 and a fair market value of $300,000. Two months after the exchange, Carl sold the
duplex to his business associate to whom he was not related for $312,000. How much, if any, gain or loss did Carl
recognize with respect to the sale by Carl two months after the transaction
with Bob?
a. No gain or loss was
recognized.
b. $11,000 gain was
recognized.
c. $12,000 gain was recognized.
d. None of the above.
Letter Answer: ____
Explanation:
Part 5. Assume the same
facts as in Part 4, except that Carl sold the duplex to the business associate
more than two years after the exchange with Bob. Without taking into consideration any changes
to the adjusted basis of the property subsequent to the exchange with Bob (such
as for depreciation), how much, if any, gain or loss did Bob recognize with
respect to the exchange with Carl?
a. No gain or loss was
recognized.
b. $11,000 gain was
recognized.
c. $214,000 gain was recognized.
d. The transfer by Bob to
Carl is a gift.
e. $21,000.
Letter Answer: ____
Explanation:
Part 6. Under the facts of Part
5, what is Bob’s basis in the triplex?
a. $86,000.
b. $279,000.
c. $300,000.
d. $312,000.
Letter Answer: ____
Explanation:
Part 7. Assume the same
facts as in part 6, except that Carl sold the duplex to his business associate
more than two years after the exchange with Bob. Without taking into consideration any changes
to the adjusted basis of the property subsequent to the exchange with Bob (such
as for depreciation), how much, if any, isCarl’s recognized gain with respect
to these transactions?
a. No gain or loss on the
exchange with Bob, and $12,000 gain on
the subsequent sale.
b. $11,000 gain on the
exchange with Bob, and $12,000 gain on the subsequent sale.
c. $12,000 gain on the
exchange with Bob, and $279,000 on the subsequent sale.
d. None of the above.
Letter Answer: ____
Explanation:
Essay Two
Part 1. Bobby and
Bobbi were married in 2000 and in October 2015, they sold for $450,000 theirprincipal residence that they had purchased
in 2004 for $200,000. The property was owned by them as tenants by the entirety.
They made major capital improvements during their 10-year ownership totaling
$40,000. What Code Section is applicable
to the amount of gain recognized, and what, if any, is their recognized gain?
a. $250,000; Code
Section 1014.
b. $210,000; Code
Sections61 and 1001.
c. $-0-; Code
Section 1034.
d. $-0-; Code Section 121.
e. None of the
above
Letter Answer: ____
Explanation:
Part 2. Suppose
instead that in the preceding problem (part 1) Bobby and Bobbi sold their home for
$800,000. They moved into a smaller home costing $250,000. How much gain must
they recognize?
a. $560,000.
b. $500,000.
c. $310,000.
d. $60,000.
e. None of the
above.
Letter Answer: ____
Explanation:
Part 3. Assume
instead that Bobby and Bobbi resided in a neighborhood where the values had
gone way down, and the home purchased in 2004 for $200,000 (capital
improvements of $40,000) was sold for only $110,000. How much loss is deductible
on their 2015 Form 1040?
a. $200,000.
b. $130,000.
c. $90,000.
d. $-0-
e. None of the
above.
Letter Answer: ____
Explanation:
TXX 5769
Final Exam
December 7, 2015
Please
insert your answers directly into the exam in the spaces provided. (You may use
more space than provided!) Your completed exam isdue by 11 p.m. on December 12.The
entire exam should be uploaded by clicking on the Test Three icon.
Any
reference to the Code is to the Internal Revenue Code of 1986, as amended.
There
are 2 essay questions (with multiple parts to each) requiring concise answers. Essay
One is worth a maximum total of 21 points (7 partswith a maximum of 3 points
each) and Essay Two is worth a maximum
total of 12 points (3 parts with a maximum of 4 points each).
Please
answer each of the following questions.
In addition to choosing the correct answer, please concisely explain why
the chosen answer is correct, what primary sources and what secondary sources you
used in reaching your conclusion. Please be specific and advise as to which of
the tax service databases you used and what materials in the database assisted
you in reaching your conclusion.
Essay
One
Part 1 –
Bob owned a duplex used as rental property. The duplex had an adjusted basis to Bob of
$86,000 and a fair market value of $300,000.
Bob transferred the duplex to his brother, Carl, in exchange for a
triplex that Carl owned. The triplex had
an adjusted basis to Carl of $279,000 and a fair market value of $300,000. Two months after the exchange, Carl sold the
duplex to his business associate to whom he was not related for $312,000. How much, if any, was Bob’s recognized gain
or loss with respect to these transactions?
a. No gain or loss is
recognized.
b. $11,000 gain is
recognized.
c. $214,000 gain is
recognized.
d. The transfer by Bob to Carl
is a gift.
e. $21,000.
Letter answer: _____
Explanation:
Part 2. What Code Section
or Sections govern the result in part 1?
a. Code Sections 1015 and
2503.
b. Code Sections 61 and 707.
c. Code Sections 318 and
1001.
d. None of the above, and
the two governing sections are discussed in the short essay below.
Letter Answer: ____
Explanation:
Part 3. Bob owned a duplex
used as rental property. The duplex had
an adjusted basis to Bob of $86,000 and a fair market value of $300,000. Bob transferred the duplex to his brother,
Carl, in exchange for a triplex that Carl owned. The triplex had an adjusted basis to Carl of
$279,000 and a fair market value of $300,000.
Two months after the exchange, Carl sold the duplex to his business
associate to whom he was not related for $312,000. How much, if any, gain or loss did Carl
recognize with respect to the transaction with Bob?
a. No gain or loss was recognized.
b. $21,000 gain was
recognized.
c. The transfer by Bob to
Carl was a gift.
d. None of the above is
correct.
Letter Answer: ____
Explanation:
Part 4. Bob owned a duplex used as rental property. The duplex had an adjusted basis to Bob of
$86,000 and a fair market value of $300,000.
Bob transferred the duplex to his brother, Carl, in exchange for a
triplex that Carl owned. The triplex had
an adjusted basis to Carl of $279,000 and a fair market value of $300,000. Two months after the exchange, Carl sold the
duplex to his business associate to whom he was not related for $312,000. How much, if any, gain or loss did Carl
recognize with respect to the sale by Carl two months after the transaction
with Bob?
a. No gain or loss was
recognized.
b. $11,000 gain was
recognized.
c. $12,000 gain was recognized.
d. None of the above.
Letter Answer: ____
Explanation:
Part 5. Assume the same
facts as in Part 4, except that Carl sold the duplex to the business associate
more than two years after the exchange with Bob. Without taking into consideration any changes
to the adjusted basis of the property subsequent to the exchange with Bob (such
as for depreciation), how much, if any, gain or loss did Bob recognize with
respect to the exchange with Carl?
a. No gain or loss was
recognized.
b. $11,000 gain was
recognized.
c. $214,000 gain was recognized.
d. The transfer by Bob to
Carl is a gift.
e. $21,000.
Letter Answer: ____
Explanation:
Part 6. Under the facts of Part
5, what is Bob’s basis in the triplex?
a. $86,000.
b. $279,000.
c. $300,000.
d. $312,000.
Letter Answer: ____
Explanation:
Part 7. Assume the same
facts as in part 6, except that Carl sold the duplex to his business associate
more than two years after the exchange with Bob. Without taking into consideration any changes
to the adjusted basis of the property subsequent to the exchange with Bob (such
as for depreciation), how much, if any, isCarl’s recognized gain with respect
to these transactions?
a. No gain or loss on the
exchange with Bob, and $12,000 gain on
the subsequent sale.
b. $11,000 gain on the
exchange with Bob, and $12,000 gain on the subsequent sale.
c. $12,000 gain on the
exchange with Bob, and $279,000 on the subsequent sale.
d. None of the above.
Letter Answer: ____
Explanation:
Essay Two
Part 1. Bobby and
Bobbi were married in 2000 and in October 2015, they sold for $450,000 theirprincipal residence that they had purchased
in 2004 for $200,000. The property was owned by them as tenants by the entirety.
They made major capital improvements during their 10-year ownership totaling
$40,000. What Code Section is applicable
to the amount of gain recognized, and what, if any, is their recognized gain?
a. $250,000; Code
Section 1014.
b. $210,000; Code
Sections61 and 1001.
c. $-0-; Code
Section 1034.
d. $-0-; Code Section 121.
e. None of the
above
Letter Answer: ____
Explanation:
Part 2. Suppose
instead that in the preceding problem (part 1) Bobby and Bobbi sold their home for
$800,000. They moved into a smaller home costing $250,000. How much gain must
they recognize?
a. $560,000.
b. $500,000.
c. $310,000.
d. $60,000.
e. None of the
above.
Letter Answer: ____
Explanation:
Part 3. Assume
instead that Bobby and Bobbi resided in a neighborhood where the values had
gone way down, and the home purchased in 2004 for $200,000 (capital
improvements of $40,000) was sold for only $110,000. How much loss is deductible
on their 2015 Form 1040?
a. $200,000.
b. $130,000.
c. $90,000.
d. $-0-
e. None of the
above.
Letter Answer: ____
Explanation:
