31 a loss on the sale of a taxpayer 39 s personal residence is deductible if the tax 4313314

31 a loss on the sale of a taxpayer 39 s personal residence is deductible if the tax 4313314

31) A loss on the sale of a taxpayer's personal residence is deductible if the taxpayer owned and lived in the home for two of five years.

32) In order for the gain on the sale of a personal residence to be excluded under Section 121, a replacement residence must be purchased within two years.

33) In the case of married taxpayers, an individual may claim the Sec. 121 exclusion even if the individual's spouse used the exclusion within the past two years.

34) The taxpayer must be occupying the residence at the time of the sale in order for Sec. 121 to apply.

35) If a principal residence is sold before satisfying the ownership and use tests, part of the gain may be excluded if the sale is due to a change in employment, health, or unforeseen circumstances.

36) All of the following qualify as a like-kind exchange except

A) an apartment building held for investment for farmland used in a trade or business.

B) a printer used in trade or business for a computer used in trade or business.

C) improved real estate held for investment for unimproved real estate held for investment.

D) an airplane used in trade or business for a general purpose truck used in trade or business.

37) Which of the following statements with respect to a like-kind exchange is false?

A) Property of one class must be exchanged for property of the same class.

B) An exchange of inventory does not qualify as a like-kind exchange.

C) Personal property must be exchanged for personal property.

D) Sale of property and subsequent purchase of like-kind property will always qualify as a like-kind exchange.

38) A owns a ranch in Wyoming, which B offers to purchase. A is not willing to sell the ranch but is willing to exchange the ranch for an apartment complex in Louisiana. The complex is available for sale. B purchases the apartment complex in Louisiana from C and transfers it to A in exchange for A's ranch. The ranch and the complex each have a $1,000,000 fair market value. Which of the following is true?

A) The transaction qualifies as a like-kind exchange for B but not for A.

B) The transaction qualifies as a like-kind exchange for both B and A.

C) The transaction qualifies as a like-kind exchange for A but not for B.

D) The transaction does not qualify as a like-kind exchange for either B or A.

39) Dean exchanges business equipment with a $120,000 adjusted basis for $40,000 cash and business equipment with a $140,000 FMV. What is the amount of gain which Dean recognizes on the exchange?

A) $0

B) $20,000

C) $40,000

D) $60,000

40) Daniella exchanges business equipment with a $100,000 adjusted basis for $10,000 cash and business equipment with a $96,000 FMV. What is the amount of gain recognized on the exchange?

A) $0

B) $4,000

C) $6,000

D) $10,000

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