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WorksheetsBasis Rules
Total questions: 14
Worksheet time: 7mins
What is basis?
Depreciation
Investment for tax purposes
A made-up concept
Always the cost of the asset
§1231 assets are...
Real and personal depreciable property
Property held for more than one year
Utilized in the taxpayers trade or business
All of the above
What information do you need when calculating the amount and character of a gain or loss on the sale of property?
Basis
Holding Period
Sales Proceeds
Property Use/Type of Asset
A loss on a §1245 asset is treated as
An ordinary loss
A short-term capital loss
A long-term capital loss
A business Investment Loss
How do you determine the gain or loss on a sale?
Amount Realized - Adjusted Basis
Adjusted Basis - Amount Realized
FMV of Property Sold + Adjusted Basis
Acquisition Cost + Sales Proceeds
Unrecaptured §1250 gains are taxed at...
5%
15%
25%
35%
What is the general rule under Section 1012 for the basis of property?
Basis is equal to the cost of the property
Basis should be adjusted
There is no general rule in Section 1012
Basis is equal to the FMV of the property
Depreciation recapture for §1245 assets are treated as...
Short-term capital gains
Ordinary income
Long-term capital gains
Monopoly money
What is an example of a disposition of property?
Finding property on the sidewalk
Buying property
Selling Property
Which is the best answer to "why is basis important?"
To determine which asset you want to depreciate
To determine gain/loss
Statement of Cash Flows
Audits
Under which area(s) of tax is basis important?
Partnership Tax
Corporate Tax
Gift & Estate Tax
Individual Income Tax
Where is basis in the internal revenue code?
Subchapter O
Subchapter K
Subchapter C
Subchapter X
What is the character of the gain or loss that would occur with the sale of a trade or business asset held for less than 1 year?
Short-Term Capital
Ordinary
Long-Term Capital
1231
What does Section 1016 of the Internal Revenue Code govern?
Cost Basis of Property
Gains and Losses
Capital Assets
Adjustments to Basis
