Henry swaps his shopping center for Sarah’s office

Question 1 (10 points) Henry swaps his shopping center for Sarah’s office building, and the exchange qualifies as a like­kind exchange. Henry’s adjusted basis for the shopping center is $600,000 and the center is subject to a liability of $180,000. The FMV of Sarah’s office building is $770,000 and it is subject to a liability of $100,000. Each asset is transferred subject to the liability. What is Henry’s recognized gain, if any, on the transaction;and what is his basis in the office building?Question 1 options:Gain: $250,000 A) Basis: $600,000 Gain: $250,000 B) Basis: $680,000 Gain: $80,000 C) Basis: $600,000 Gain: $80,000 D) Basis: $680,000 Question 2 (10 points) Prince Corp. owns a warehouse with an adjusted basis of $400,000. The warehouse is destroyed by an earthquake. The insurance company paid Prince $750,000 as compensation for the loss on the warehouse. Ten months after the loss, Prince uses the insurance proceeds and other funds to acquire a new warehouse for $682,000 and equipment for its factory at a cost of $90,000. Assuming that Prince elects to defer as much of the gain on the conversion as possible, what is its recognized gain, its basis in the new warehouse, and its basis in the equipment it acquired?Question 2 options:A) Recognized Gain: $350,000 Basis in New Warehouse: $682,000 Basis of Machinery Acquired: $90,000 Recognized Gain: $350,000 B) Basis in New Warehouse: $400,000Basis of Machinery Acquired: $90,000 Recognized Gain: $68,000 C) Basis in New Warehouse: $400,000Basis of Machinery Acquired: $90,000 Recognized Gain: $68,000 D) Basis in New Warehouse: $682,000Basis of Machinery Acquired: $90,000 Question 3 (10 points) Jason exchanges a building with a basis of $35,000, and subject to a liability of $30,000, for land with a FMV of $50,000 owned by Maria. Maria takes the land subject to the liability. The amount realized by Jason is:Question 3 options: A) $35,000 B) $30,000 C) $80,000 D) 50,000 Question 4 (10 points) Peter, a single taxpayer, bought a house to use as a rental property on April 1, 2007, for $300,000. He moved into the house on June 1, 2013, and used it as his personal residence until August 1, 2014, when he sold it for $500,000. Depreciation taken while the property was used as a rental property was $25,000. What was Peter’s:a) realized gain on the sale of the property?b) recognized gain on the sale of the property?c) recognized gain on the sale of the property if it is not sold until August 1, 2015, for $500,000?Question 4 options:a) $225,000 A) b) $225,000c) $131,000 a) $200,000 B) b) $200,000c) $0 a) $200,000 C) b) $0c) $0D) a) $225,000 b) $0c) $131,000 Question 5 (10 points) In a “like­kind” exchange of an investment asset for a similar asset that will also be held as an investment, no taxable gain or loss will be recognized on the transaction if both assets consist of:Question 5 options: A) Rental real estate located in different states. B) Partnership interests. C) Convertible preferred stock. D) Convertible debentures. Question 6 (10 points) In Year 9, Ralston exchanged commercial real estate that she owned for other commercial real estate plus cash of $50,000. The following additional information pertains to this transaction:Property given up by Ralston Fair value $ 500,000 Adjusted basis 300,000Property receivedby RalstonFair value 450,000 What amount of gain should be recognized in Ralston’s Year 9 income tax return?Question 6 options: A) $200,000 B) $500,000 C) $50,000 D) $450,000 Question 7 (10 points) A taxpayer is trading in an automobile used solely for business purposes for another automobile to be used in his business. The automobile originally cost $35,000 and he has taken $12,000 in depreciation. The old automobile is currently worth $20,000 and the new automobile the taxpayer wants in exchange is worth $20,000. No other cash or property is exchanged in the transaction. What is the gain or loss realized and recognized by the taxpayer on this transaction, and what is the taxpayer’s basis in the new automobile?Question 7 options:$3,000 realized loss A) $0 recognized loss$20,000 basis $3,000 realized loss B) $3,000 recognized loss$23,000 basis $3,000 realized loss C) $3,000 recognized loss$20,000 basis $3,000 realized loss D) $0 recognized loss$23,000 basis Question 8 (10 points) A taxpayer is trading in an automobile used solely for business purposes for another automobile to be used in his business. The automobile originally cost $35,000 and he has taken $18,000 in depreciation. The old automobile is currently worth $20,000 and the new automobile the taxpayer wants in exchange is worth $22,000. The taxpayer has agreed to pay $2,000 cash in addition to the trade­in. What is the taxpayer’s realized and recognized gain or loss on the transaction and his basis in the new automobile received?Question 8 options:$3,000 realized gain A) $0 recognized gain$19,000 basis $3,000 realized gain B) $3,000 recognized gain$19,000 basis $5,000 realized gain C) $5,000 recognized gain$17,000 basis $5,000 realized gain D) $0 recognized gain$17,000 basis Question 9 (10 points) All of the following qualify as a like­kind exchange except: Question 9 options: A) Improved real estate held for investment for unimproved real estate held for investment. B) A printer used in trade or business for a computer used in trade or business. C) An airplane used in trade or business for a general purpose truck used in trade or business. D) An apartment building held for investment for farmland used in a trade or business Question 10 (10 points) Dave and Jenny, both 55 years old and married, sell their personal residence to Andre. Andre pays $660,000 and assumes their $90,000 mortgage. To make the sale they pay $20,000 in commissions and $10,000 in legal costs. They have owned and lived in the house for seven years and their tax basis is $200,000. What is the amount of gain recognized on the sale?Question 10 options: A) $520,000 B) $50,000 C) $20,000 D) $0