1.A retail building used in the trucking business of a sole proprietor is sold on February 10, 2010 for $300,000. It had been acquired in 1992 for $275,000. Straight-line depreciation of $175,000 had been taken on the property. What is the maximum unrecaptured § 1250 gain from this disposition after considering depreciation recapture?
a. $0.
b. $100,000.
c. $175,000.
d. $275,000.
e. None of the above.
2. The HAT Partnership has three corporate partners with taxable years and ownership interests in the venture as follows:
Tax Year Interest in
Partner Ending Partnership
H Inc. April 30 30%
A Inc. October 31 40%
T Inc. November 30 30%
a. A partnership must use the calendar year to report its income.
b. The partnership can elect to use a November year end.
c. Under the least aggregate deferral calculations, using a fiscal year ending October 31 will result in an aggregate deferral of .30 (1 X .30) with respect to T and 1.8 (6 X .30) with respect to H.
d. The partnership must use an October 31st year end since A Inc. has the largest ownership interest.
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None of the above.
3. Which of the following is not an exception to the accrual method of reporting requirement for corporations?
a. A corporation with average annual gross receipts for the most recent three-year period of $5 million or less.
b. A tax shelter.
c. A farming business.
d. A qualified personal service corporation.
e. None of the above.