Chapter 15 Quiz

Question 1 of 15

1. Question

Federal income tax is:

proportional
regressive
progressive
latent

Question 2 of 15

2. Question

Tax credits are:

deducted from income
added to income
subtracted directly from the tax owed
added to the tax owed

Question 3 of 15

3. Question

Which of the following may Jones deduct from her taxable income when preparing her income tax statement?

Cost of repairs to her home
Cost of patio in backyard
Interest paid on home mortgage
Special assessments paid for new sidewalks in front of home

Question 4 of 15

4. Question

A gain on the sale of an asset held for personal use or as an investment is considered a:

capital expenditure
capital asset
capital gain
tax deduction

Question 5 of 15

5. Question

Which of the following is considered a capital expenditure?

Painting the exterior of a building
Replacing a broken window
Adding a new room to a home
Repairing the roof

Question 6 of 15

6. Question

Which of the following properties cannot be depreciated?

Property held for production of income
Property used in a trade or business
Personal residence
Six-unit apartment building

Question 7 of 15

7. Question

Which of the following are tax-deductible items for an owner-occupied residential property?

Mortgage interest payments, late charges, and points
Mortgage interest payments, prepayment penalties, and real estate taxes
Mortgage interest payments, capital improvements, and hazard insurance
Real estate taxes, special assessments, and repair deductions

Question 8 of 15

8. Question

Which of the following is not eligible for a tax-free exchange?

Subdivided land held by a developer
Unimproved land
Factory owned by the manufacturer
Residential rental property

Question 9 of 15

9. Question

An apartment complex valued at $1,200,000, encumbered with a loan for $1,100,000, is exchanged for a retail building valued at $1,270,000, encumbered with a loan for $1,160,000. What is the amount of the boot in this transaction?

$20,000
$60,000
$90,000
$150,000

Question 10 of 15

10. Question

Depreciation deductions:

increase basis
decrease basis
eliminate basis
have no effect on basis

Question 11 of 15

11. Question

A taxable gain is generally recognized in the year it is:

spent
realized
allocated
fulfilled

Question 12 of 15

12. Question

The IRS treats any economic benefit to a taxpayer as:

assets
income
wealth
basis

Question 13 of 15

13. Question

Which of the following represents an involuntary conversion?

Sale of personal residence because of out-of-town transfer
Tax-free exchange
Owner receives condemnation award
Three-year installment sale with a balloon payment

Question 14 of 15

14. Question

Which of the following is not depreciable property?

High rise office building
Apartment building
Grazing land
Single-family rental dwelling

Question 15 of 15

15. Question

A second home is classified as:

personal use property
principal residence property
dealer property
unimproved investment property

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