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Tax Segment P3 - Property Sales

 

In this topic your will become familiar with the rules that apply when you sell your main home. Your main home is the home lived in most of the time. You will learn the amount that you can exclude from income of the gain from the sale of your home. In addition, you will learn what to do when the sale cannot be excluded from income, in which case it becomes fully taxable. You will also learn what to do with a non-deductible loss of the sale of your home. 

Student Instructions:

Print this page, work on the questions and then submit test by mailing the answer sheet or by completing quiz online.

Instructions to submit quiz online successfully: Step-by-Step check list

Answer Sheet            Quiz Online

Most forms are in Adobe Acrobat PDF format. Get Adobe ReaderYou will need Adobe Reader to view and print these forms. If you do not already have Adobe Reader installed on your computer, you may download the software for free.

 

Material needed to complete the sections in this assignment:

Use IRS Publication 544, IRS Publication 537 and IRS Publication 551 to complete this topic.

 

 

 

1. Which of the following property exchanges does NOT qualify as a like-kind exchange?

A. Exchange of city property for farm property.
 B. Exchange of partnership interests.
 C. Exchange of improved property for unimproved property.
 D. Exchange of an ownership in real estate for a thirty year lease in real estate.

2. Which of the following transactions is NOT a transaction that results in a gain or loss subject to section 1231 treatment?

A. Sales or exchanges of leaseholds.
 B. Sales or exchanges of cattle and horses.
C. The sale of a copyright, literary, musical, or artistic composition that you created.
 D. Sales or exchanges of un-harvested crops sold together with land to the same buyer.

3. Larry owned 35 shares of Flower Corporation stock for which he had paid $3,500. He sold this stock to this sister, Karen, for $3,000. Karen later sold this stock to her cousin, Joe, for $10,000. What is Larry's and Karen's recognized gain or loss, if any?

A. $0 loss for Larry and $6,500 gain for Karen.
 B. $0 loss for Larry and $7,000 gain for Karen.
C. $500 loss for Larry and $7,000 gain for Karen.
 D. $0 for Larry and $0 for Karen.

 
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Revised: 12/03/17