Question

Question 20 of 75. Which of the following statements is correct with regard to unrecaptured $1250 gain? Unrecaptured 51256 gain is: Taxed at 28% capital gains tax rate or the taxpayer's lower tax rate applicable Taxed at 25% capital gains tax rate or the taxpayer's lower tax rate, if applicable O Taxed at 18% capital gains tax rate or the taxpayer's lower tax rate, if applicable Taxed at O capital gains tax rate or the taxpayer's lower tax rate. If applicable Mark for follow up Question 21 of 75. In an exchange, Archie gave up his fully depreciated business-usdump truck (FMV $15.000) and $5,000 for a newer business-use dump truck (FMV $20.000). The exchange was completed on January 12, 2018. Which of the following statements is TRUE in regard to Archie's exchange of business-use property? Archie will not be able to defer a gain on his exchange because beginning in tax years after December 2017. Section 1031 like-kind exchanges only apply to exchanges of real property Archie exchanged business-use property for another property that was also business-use, so he will be able to use the like- kind exchange treatment to defer his gain. Beginning after December 2018, Archie will be able to use Section 1031 like-kind exchange treatment on personal and intangible property Archie sold the business-use property in 2018 during the transition period for like-kind exchanges that are not real property exchanges Mark for follow up « Back Save / Return Later Summary Next

Answer 1

Archie's gain from exchange = Fair market value of new dump truck - Fair market value of old dump truck - Cash Paid

= $20,000 - $15,000 - $5.000

= $0

Archie's gain from exchange is zero  

So correct answer is option(1) that is :

Archie will not able to defer a gain on his exchange because beginning in the tax years after December 2017,Section 1031 like kind exchanges only apply to exchange of real property.