Reference no: EM132593039

Question 1: The right of redemption __________.

A. Allows only the original buyer to stop foreclosure proceedings by purchasing the property in full.

B. Allows only the related parties to stop foreclosure proceedings by paying the additional costs associated with the foreclosure.

C. Allows the original buyer, and sometimes related parties, to stop foreclosure proceedings by purchasing the property in full.

D. Enables only the related parties to stop foreclosure proceedings purchasing by the property in full.

Question 2: When a taxpayer receives a Form 1099-A, __________.

A. Gain or loss from the sale of property must be calculated.

B. The loss from foreclosure of property must be subtracted from wage income.

C. Ordinary income from the abandonment of property must be calculated.

D. Ordinary income from the cancellation of debt must be determined.

Question 3: Which of the following statements is TRUE if a seller realized $21,000 in gain on the original sale of their principal residence, and repossessed and resold the property 14 months later?

A. No gain is recognized on the repossession, and the repossession and original sale are reported as separate transactions.

B. No gain is recognized on the repossession, and the repossession and original sale are treated as a single transaction.

C. The seller may elect to exclude the gain, if any, from the repossession in the year of repossession.

D. The seller may elect to exclude the gain, if any, on the repossession in the year of the original sale.