ACC 129 - Chapter 7 Review Quiz

Which form is used to record sales of property used in a trade or business?

• Schedule D

• Form 4797

• Form 8949

• Table 7-1

What does Schedule D record?

• Sales of property used in a trade or business

• Sales of property held for personal use

• Sales of property held for investment

• Definitions of key terms used in the chapter

What are the two most common types of ordinary assets mentioned?

• Stocks and bonds

• Inventory and accounts receivable

• Trade or business property

• Personal use assets

Which of the following is an example of §1221 capital property (capital assets)?

• Inventory

• Accounts receivable

• Investment in stocks and bonds

• Copyrights held by the creator

Which of the following is NOT defined as a capital asset by the Internal Revenue Code (IRC)?

• Timber grown on home property or investment property.

• Property used in a trade or business.

• Coin or stamp collections, gems, and jewelry.

• Gold, silver, and other metals.

How is an artistic work classified for tax purposes if sold by the creator according to the IRC?

• Always a capital asset.

• A capital asset if sold after May 17, 2006.

• Not a capital asset for the creator.

• An ordinary asset regardless of when it is sold.

How are gains on the sale of ordinary assets treated for tax purposes?

• They are fully deductible.

• They receive preferential tax treatment.

• They are not deductible.

• They do not receive preferential tax treatment.

How are losses on the sale of ordinary assets treated for tax purposes?

• They are fully deductible.

• They receive preferential tax treatment.

• They are not deductible.

• They are partially deductible.

Which of the following factors does NOT affect the tax treatment of capital assets?

• The period of time the asset is held

• The type of capital asset sold

• The taxpayer's favorite color

• The taxpayer’s tax bracket

When does the holding period for a capital asset begin?

• The day after the taxpayer acquired the property

• The day the taxpayer acquired the property

• One year after the taxpayer acquired the property

• The day the asset is sold