What would happen if an investor, did not take depreciation deductions for their property and after they sold the property they calimed a 0 dollar depreciation recapture liability on their tax return? Group of answer choices 1) The IRS will sue you for tax evasion 2) The IRS would compute the depreciation that could have been taken and then compute the depreciation recapture tax based on this amount 3) None of these are correct 4) Nothing. Thee IRS does not have any clear rules on this specific issue 5) This makes sense, as it avoids a costly tax

What would happen if an investor, did not take depreciation deductions for their property and after they sold the property they calimed a 0 dollar depreciation recapture liability on their tax return? Group of answer choices 1) The IRS will sue you for tax evasion 2) The IRS would compute the depreciation that could have been taken and then compute the depreciation recapture tax based on this amount 3) None of these are correct 4) Nothing. Thee IRS does not have any clear rules on this specific issue 5) This makes sense, as it avoids a costly tax

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter5: Business Deductions

Section: Chapter Questions

Problem 11BCRQ

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Which of the following is accurate regarding a real estate foreclosure transaction? A A foreclosure transaction can never involve recourse debt. B A foreclosure transaction can never involve nonrecoursedebt. C A foreclosure transaction has no federal income taxconsequences for the borrower. D A foreclosure transaction can have significant federalincome tax consequences for the borrower.
Which of the following statements is incorrect? Assume that the rental activity is classified as ‘production-of-income.’ If the taxpayer sells the rental property later at a loss, the loss will be treated as a capital loss (i.e., $3,000/$1,500 deduction limit in the current year). An amount that would have been paid in an arm’s-length transaction is considered a reasonable amount as deduction. Payment (except for medical or educational expense) of another person’s obligation does not result in a tax deduction for the payer. Regarding the start-up costs, if the new business is in the same line of business as the existing one and if the new business is not launched, then none of the start-up costs are deductible. Payments for a speeding ticket are nondeductible. HELP
A friend says to you, “I don’t understand how taxable temporary differences can be ‘liabilities’ and how deductible temporary differences can be ‘assets.’ It seems to me that these temporary differences relate only to the future and that accounting is based on ‘historical cost.’ In addition, the government frequently changes the tax laws, so no one knows what the future tax laws will be.” Required: Prepare a written response for your friend that explains why deferred tax assets and deferred tax liabilities are recognized and reported on a corporation’s balance sheet. Include a discussion of a valuation allowance.
True (t) or False (f) ______ The IRS does not require the taxpayer to use the same depreciation method on the tax return that is used in preparing financial statements.
The purpose of Sec. 1245 is to eliminate the advantage taxpayers would have if they were able to reduce ordinary income by depreciation deductions and also receive favorable Sec. 1231 treatment when the asset was sold. True False
What is the only way to convert a tax deferral from a 1031 like kind exchange into a tax avoidance? Group of answer choices 1) Employing a qualified intermediary 2) Using a LLC to own the property 3) Nonw of these are correct 4) Employing a smart tax acciuntant/lawyer 5) Death
For tax purposes, you can deduct the __________________________ portion of debt service. The tax deductibility of this unique to real estate Group of answer choices 1) principal, true 2) interest, true 3) not enough information has been provided 4) principal, false 5) interest, false
Pls explain too
1. According to the article by Tony Dimitriadis (see Supplementary Study Materials Folder), whether an amount received by a taxpayer following the sale of a capital asset (e.g. real estate) will be treated as capital or income depends largely on: Select one: The intention of the taxpayer when the property was first acquired The degree of renovation and development carried out on the property Whether the taxpayer held on to the property, rather than making a short term profit Whether the taxpayer is an individual or a business taxpayer All of the above are important considerations 2. Select the INCORRECT statement from the following options: Select one: The Cost Base of Personal Use Assets excludes Element 3 expenses (Ownership Costs) An antique vase bought at a garage sale for $200 and sold for $20,000 is exempt from CGT The indexation rate for assets acquired on 2 February 1986 was 41.4 All costs incurred under Element 3 (Ownership Costs) should be included in the indexation…
Which of the following statements, if any, is false? O An individual can get lower Federal tax rates on long-term capital gains as compared to short-term capital gains. O A corporation can get lower Federal tax rates on long-term capital gains as compared to short-term capital gains. DAn individual has a taxable capital gain if they sell their personal car at a gain O Normally a taxpayer must own a capital asset for more than one year in order to get long-term capital gain (or loss) treatment on the sale of that asset. None of the above - they are all true statements.
not use ai please