Tax Test Answers
* Question 1
5 out of 5 points | | | An artist's painting is not a capital asset when held by the artist.Answer | | | | | Selected Answer: | True | Correct Answer: | True | | | | | * Question 2
0 out of 5 points | | | Taxpayers are allowed to offset net short-term capital losses with net long-term capital gains.Answer | | | | | Selected Answer: | False | Correct Answer: | True | | | | | * Question 3
0 out of 5 points | | | Net short-term capital gains may be offset by net long-term capital losses.Answer | | | | | Selected Answer: | False | Correct Answer: | True | | | | | * Question 4
0 out of 5 points | | | Accounts receivable are capital assets.Answer | | | | | Selected Answer: | True | Correct Answer: | False | | | | | * Question 5
0 out of 5 points | | | If property is received from a decedent, the taxpayer who receives the property has the same basis in the property as the decedent.Answer | | | | | Selected Answer: | True | Correct Answer: | False | | | | | * Question 6
5 out of 5 points | | | For purposes of taxation of capital gainsAnswer | | | | | Selected Answer: | b. Gains on Section 1231 assets may be treated as long-term capital gains, while losses in some cases may be deducted as ordinary losses | Correct Answer: | b. Gains on Section 1231 assets may be treated as long-term capital gains, while losses in some cases may be deducted as ordinary losses | | | | | * Question 7
5 out of 5 points | | | An asset's adjusted basis is computed as:Answer | | | | | Selected Answer: | a. Original basis + capital improvements - accumulated depreciation | Correct Answer: | a. Original basis + capital improvements - accumulated depreciation | | | | | * Question 8
5 out of 5 points | | | If insurance proceeds exceed the taxpayer's basis in property destroyed by fire,
5 out of 5 points | | | An artist's painting is not a capital asset when held by the artist.Answer | | | | | Selected Answer: | True | Correct Answer: | True | | | | | * Question 2
0 out of 5 points | | | Taxpayers are allowed to offset net short-term capital losses with net long-term capital gains.Answer | | | | | Selected Answer: | False | Correct Answer: | True | | | | | * Question 3
0 out of 5 points | | | Net short-term capital gains may be offset by net long-term capital losses.Answer | | | | | Selected Answer: | False | Correct Answer: | True | | | | | * Question 4
0 out of 5 points | | | Accounts receivable are capital assets.Answer | | | | | Selected Answer: | True | Correct Answer: | False | | | | | * Question 5
0 out of 5 points | | | If property is received from a decedent, the taxpayer who receives the property has the same basis in the property as the decedent.Answer | | | | | Selected Answer: | True | Correct Answer: | False | | | | | * Question 6
5 out of 5 points | | | For purposes of taxation of capital gainsAnswer | | | | | Selected Answer: | b. Gains on Section 1231 assets may be treated as long-term capital gains, while losses in some cases may be deducted as ordinary losses | Correct Answer: | b. Gains on Section 1231 assets may be treated as long-term capital gains, while losses in some cases may be deducted as ordinary losses | | | | | * Question 7
5 out of 5 points | | | An asset's adjusted basis is computed as:Answer | | | | | Selected Answer: | a. Original basis + capital improvements - accumulated depreciation | Correct Answer: | a. Original basis + capital improvements - accumulated depreciation | | | | | * Question 8
5 out of 5 points | | | If insurance proceeds exceed the taxpayer's basis in property destroyed by fire,