ACCT 324 Week 7 Quiz
1. (TCO 6) An individual taxpayer owns a landscape painting. The painting would NOT be a capital asset if it was held by the taxpayer in which of the following circumstances
2. (TCO 6) Blue Company signs a 12-year franchise agreement with Fast Taco. Fast Taco retained significant powers, rights, and a continuing interest. Blue (the franchisee) makes noncontingent payments of $15,000 per year for the first 5 years of the franchise. Blue Company also pays a contingent fee of 2% of gross sales every month. Which of the following statements is correct?
3. (TCO 6) Harry inherited a residence from his mother when she died. The mother had a tax basis of $566,000 for the residence when she died, and the residence was worth $433,000 at the date of her death. Which of the statements below is correct?
4. (TCO 6) Which of the livestock below is a § 1231 asset?
5. (TCO 11) Rea is a songwriter. She wrote a song, copyrighted it, and sold it for $10,000 cash. The song had a zero tax basis. The purchaser was a national song brokerage company. Rea is in the business of songwriting. The $10,000 received by Rea is:
6. (TCO 11) Ryan has the following capital gains and losses for 20×2: $3,000 STCL, $3,000 28% gain, $2,000 25% gain, and $6,000 0%/15% gain. Which of the following is correct?
7. (TCO 11) Martha has both long-term and short-term capital gains and losses. The result of netting these gains and losses is a net long-term capital loss. Martha has no qualified dividend income. Also, Martha’s taxable income
8. (TCO 11) An individual had the following gains and losses during 20×2 on property held for the long-term holding period: sale of Orange common stock ($3,000 gain), sale of real property used in the taxpayer’s business ($1,800 loss), and destruction of real property used in the taxpayer’s business by fire ($1,000 loss). Which of the following is correct?
9. (TCO 11) Which of the following creates potential § 1245 depreciation recapture?
10. (TCO 11) What is the proper series of steps in Section 1231 computation?