Question

NOTE: All questions will be based on Tax Cuts & Jobs Act (TCJA) and tax returns prepared after 2017

17) All of the following MACRS assets useful life categories are correct, except:

A) Trucks have a 5-year useful life under MACRS.

B) Computers have a 3-year useful life under MACRS.

C) Desks have a 7-year useful life under MACRS.

D) Residential rental real estate buildings have a 27.5-year useful life under MACRS.

E) Non-residential real estate buildings have a 39-year useful life under MACRS.

19) An investor exchanges an office building located in Niagara Falls, NY for an office building located in Niagara Falls, Ontario. The exchange does not qualify as like-kind.

A) TRUE

B) FALSE

20) The exchange of a partnership interest for an interest in another partnership qualifies as a like-kind exchange.

A) TRUE

B) FALSE

21) A sale of property and subsequent purchase of like-kind property may be treated as a like-kind exchange if the two transactions are interdependent using a qualifying 3-party exchange.

A) TRUE

B) FALSE

23) Indicate with a "yes" or a "no" which of the following are like-kind exchanges (assume all assets are held for business or investment purposes).

a. Exchange of common stock held as an investment for land held as an investment.

b. Exchange of farmland for an apartment building.

c. Exchange of office furniture used in trade or business for computer used in a trade or business

d. Exchange of unimproved real estate for improved real estate, both held for investment purposes.

e. Exchange of automobile used in trade or business for another automobile used in trade or business

Answer: a. No; b. Yes c. No; d. Yes; e. No

24) All or part of gain realized on an involuntary conversion is deferred but not permanently excluded if qualifying replacement property is acquired within the requisite period of time.

A) TRUE

B) FALSE

25) In an involuntary conversion, the basis of replacement property is its cost reduced by the gain deferred.

A) TRUE

B) FALSE

Answer 1

Ans. 17. Computer have a 5-Years useful life under MACRS.

So. (B) is Correct answer

Ans. 19. An invester exchanges an office building located in Niagara Falls,Newyork for an office building located in Niagara Falls, Ontario. the exchange does not Qualify as like kind

So (A)TRUE is correct answer

Ans. 20 The exchange of a partnrship intrest for an intrest in another partnership does not qualifies as a like kind exchange.

So (B) FALSE is correct answer

Ans. 21. A sale of property and subsequent purchses of like kind property may be treated as a like kind exchange if the two transactions are interdependent using a qualifying 3 party exchange.

So (B) FALSE is correct answer

Ans. 23 A. Exchange of common stock held as an investment for land held as an investment - NO

B. Exchange of farmland for an apartment building - YES

C. Exchange of office furniture used in trade or bussiness for computer used in a trade or bussiness - NO

D. Exchange of unimproved real estate for improved real estate, both held for investment purposes.- YES

E. Exchanges of automobile used in trade or bussiness for another automobile used in trade or bussiness - NO

Ans. 24. All or part of gain realized on an involuntary conversion is deferred but not permanently excluded if qualifying replacement property is acquired with in the requisite period of time

So (A) TRUE is correct answer

Ans. 25. In an involuntary conversion, the basis of replacement property is its cost reduced by gain deferred.

So (A) TRUE is correct answer