Taxation of Capital Assets and Property Transactions Quiz

Test your knowledge on taxation of capital assets and property transactions. Learn about gains, losses, exemptions, and like-kind exchanges.

Practice Learn Test

Which of the following is a capital asset?

Inventory

Land held for sale in the ordinary course of business

Accounts receivable

Machinery used in business

What is the tax treatment for gains on the sale of a capital asset held for more than one year?

Taxed at ordinary income tax rates

Taxed at a special long-term capital gains rate

Exempt from tax

Taxed at a higher rate than short-term gains

Which of the following is not considered a capital asset?

Stocks

Bonds

Real estate used in a trade or business

Accounts receivable

Which of the following is a true statement about the tax treatment of capital losses?

Capital losses can only be used to offset capital gains

Capital losses can only be carried forward

Capital losses can be used to offset both capital gains and ordinary income up to certain limits

Capital losses are not deductible for tax purposes

Under what circumstances is the sale of a personal residence exempt from capital gains tax?

If the residence has been owned for at least 2 years and the gain is less than $250,000 for an individual ($500,000 for a married couple)

If the residence has been owned for at least 5 years and the gain is reinvested in another personal residence

If the residence has been used as a rental property for at least 3 years

If the residence is located in a designated historic district

Which of the following is not a valid method for valuing property for tax purposes?

Fair market value

Adjusted basis

Purchase price

Assessed value

Which of the following is an example of a 1031 exchange?

Selling stocks and using the proceeds to buy bonds

Selling a personal residence and buying a larger one

Selling investment property and using the proceeds to buy similar property

Selling a business and using the proceeds to retire

Which of the following is a characteristic of a like-kind exchange under Section 1031?

The properties exchanged must be similar in location

The properties exchanged must be similar in value

The properties exchanged must be held for investment or use in a trade or business

The properties exchanged must be sold simultaneously

Which of the following is a requirement for a like-kind exchange under Section 1031?

The properties must be located in the same state

The properties must be exchanged for cash

The properties must be used for personal purposes

The properties must be identified within 45 days of the exchange

Taxation of Capital Assets and Property Transactions Quiz

Which of the following is a capital asset?

What is the tax treatment for gains on the sale of a capital asset held for more than one year?

Which of the following is not considered a capital asset?

Which of the following is a true statement about the tax treatment of capital losses?

Under what circumstances is the sale of a personal residence exempt from capital gains tax?

Which of the following is not a valid method for valuing property for tax purposes?

Which of the following is an example of a 1031 exchange?

Which of the following is a characteristic of a like-kind exchange under Section 1031?

Which of the following is a requirement for a like-kind exchange under Section 1031?

Quiz Questions with Answers

Test Your Knowledge

Similar Quizzes

Popular Quizzes in Taxation

Popular Quizzes in Finance

Other Quizzes to Explore