QUESTION 1: Jarred sells for $300,000 rental property he purchased in 2006 for $160,000. In 2008 he replaced the entire roof (not a repair) for $12,000 and also paid $2,000 for repairs to the inside of the rental. Thus far, Jared deducted $18,440 for depreciation. What is Jarred's realized and recognized gain or loss on this sale?

1. $58,440 Gain

2. $9,560 Gain

3. $70,440 Gain

4. $46,440 Gain

QUESTION 2: Alice sells land that has $60,000 mortgage. She receives cash $40,000 plus stock in ABC company worth $30,000. The buyer is assuming the mortgage. Alice has an adjusted basis in the land of $80,000. What is Alice's realized/recognized gain/loss?

1. $50,000 Gain

2. ($10,000) Loss

3. $20,000 Gain

4. None of the above

QUESTION 3: Alice sells land that has $60,000 mortgage. She receives cash $40,000 plus stock in ABC company worth $30,000. The buyer is assuming the mortgage. Alice has an adjusted basis in the land of $80,000. What is Alice's amount realized under IRC Section 1001(b)?

1. $70,000

2. $130,000

3. $100,000

4. $50,000

QUESTION 4: Joseph purchased 7,500 shares of BCD corp in 2000 for $60,000. Unfortunately he did not have the good fortune of benefiting from the increase in value of the stock since he died December 11, 2013 when the stock was worth $500,000. The estate did not elect an alternate valuation date. The stock was inherited by his daughter, Judy. She received the stock from the estate on April 1, 2014 when it had a value of $525,000. What is Judy's basis in the stock?

$60,000

$420,000

$500,000

$525,000

QUESTION 5: Jack and Jill reached an amicable settlement for their divorce. Under the terms of their agreement Jill is going to transfer 1000 shares of XYZ Corp stock to Jack in satisfaction of his property rights. The stock originally cost Jill $30,000 and it's currently trading on the NYSE with the FMV of $45,000. Jack has asked you what his basis is in the shares of stock.

1. $45,000

2. $30,000

3. $0

4. Basis cannot be determined