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Questions and Answers
What is the primary method of depreciation mentioned under §168(b)(1)(A)?
What is the primary method of depreciation mentioned under §168(b)(1)(A)?
- Straight-line method
- Sum of the years' digits method
- 150% declining balance method
- 200% declining balance method (correct)
Which depreciation method is referenced under §168(b)(2)?
Which depreciation method is referenced under §168(b)(2)?
- Straight-line method
- 200% declining balance method
- 150% declining balance method (correct)
- Accelerated depreciation method
Which statement best describes how the applicable depreciation method is categorized under §168?
Which statement best describes how the applicable depreciation method is categorized under §168?
- Based solely on the asset's purchase price
- Depending on the type of asset and its usage (correct)
- Determined by the asset's estimated lifespan
- Only applicable for assets over $1,000
What is the primary goal of using the declining balance method of depreciation?
What is the primary goal of using the declining balance method of depreciation?
Which method is typically preferred for most tangible property according to §168?
Which method is typically preferred for most tangible property according to §168?
What is the primary purpose of athletic scholarships?
What is the primary purpose of athletic scholarships?
Which of the following best describes educational grants?
Which of the following best describes educational grants?
What is an annuity in the context of financial planning for education?
What is an annuity in the context of financial planning for education?
Which statement is true regarding the comparison between athletic scholarships and educational grants?
Which statement is true regarding the comparison between athletic scholarships and educational grants?
What distinguishes annuities from other forms of educational funding?
What distinguishes annuities from other forms of educational funding?
What is an example of a taxpayer (TP) producing services for themselves?
What is an example of a taxpayer (TP) producing services for themselves?
Which scenario best illustrates a taxpayer using their own durable goods?
Which scenario best illustrates a taxpayer using their own durable goods?
In which case would the taxpayer NOT be using goods and services for themselves?
In which case would the taxpayer NOT be using goods and services for themselves?
What does the term 'durable goods' refer to in the context of a taxpayer's use?
What does the term 'durable goods' refer to in the context of a taxpayer's use?
Which of the following statements about taxpayers using their own residence is true?
Which of the following statements about taxpayers using their own residence is true?
What types of liabilities of a seller are included in the seller's amount realized?
What types of liabilities of a seller are included in the seller's amount realized?
Which regulation specifies the inclusion of seller's liabilities in the amount realized?
Which regulation specifies the inclusion of seller's liabilities in the amount realized?
When calculating the seller's amount realized, which of the following is NOT considered?
When calculating the seller's amount realized, which of the following is NOT considered?
The seller's amount realized includes which of the following aspects?
The seller's amount realized includes which of the following aspects?
Which of the following describes a 'non-recourse' liability in the context of seller's amount realized?
Which of the following describes a 'non-recourse' liability in the context of seller's amount realized?
What is another term for the FMV basis of property acquired at the date of decedent's death?
What is another term for the FMV basis of property acquired at the date of decedent's death?
Which section of the law discusses the FMV of acquired property upon the decedent's death?
Which section of the law discusses the FMV of acquired property upon the decedent's death?
What effect does the FMV basis have on property acquired due to the decedent's death?
What effect does the FMV basis have on property acquired due to the decedent's death?
The term 'step-up basis' specifically refers to:
The term 'step-up basis' specifically refers to:
Which of the following is NOT a term associated with the basis of property acquired upon a decedent's death?
Which of the following is NOT a term associated with the basis of property acquired upon a decedent's death?
Study Notes
Applicable Depreciation Method
- The applicable depreciation method (ADM) is defined in section 168(b)
- The ADM can be calculated using the 200% declining balance method or the 150% declining balance method
- The 200% declining balance method is defined in section 168(b)(1)(A)
- The 150% declining balance method is defined in section 168(b)(2)
Amount Realized
- The amount realized includes the liabilities of a seller, whether recourse or non-recourse, assumed or taken subject to by the buyer
- The amount realized is defined in Regulation 1.1001-2(a)(1)
FMV (Fair Market Value)
- The fair market value (FMV) of acquired property on the date of the decedent's death is used to determine the amount realized
- This is defined in §1014(a)(1)
- The FMV is also referred to as the "step-up," "step-down," or "fresh start" basis
Inherent from Death of a Spouse
- The death of a spouse is inherent in the determination of FMV and amount realized
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Description
This quiz covers essential concepts related to real estate taxation, including the applicable depreciation methods, amount realized, fair market value, and implications of a spouse's death. Test your knowledge on these tax definitions and regulations to ensure you understand the nuances of real estate transactions.
