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Which of the following statements is not true regarding a REMIC?

A) A REMIC is a taxable entity for federal income tax purposes and must file an information return.

B) Any entity, whether a corporation, partnership, or trust, that meets specified requirements may elect to be treated as a REMIC.

C) The conduit feature of the REMIC applies regardless of whether the REMIC otherwise would be treated as a corporation, partnership, trust, or any other legal entity.

D) The holder of a residual interest in a REMIC takes into account as ordinary income the daily portion of the taxable income or net loss of the REMIC for each day during the taxable year in which the interest was held.

A corporate mortgagee who is unable to collect on a mortgage note is entitled to a bad debt deduction under Code Sec. 166 and:

A) Is entitled to take a deduction in the year the debt becomes worthless.

B) Is always entitled to an ordinary deduction that is deductible in full against ordinary income.

C) Must treat a bad debt as a capital loss subject to the limits on the deduction of capital losses.

D) A and B

E) A and C

Taxpayer X exchanges land in a Section 1041 Exchange subject to a mortgage of $100,000, and receives land subject to a mortgage of $150,000 plus cash in the amount of $40,000. His taxable boot is:

A) $-0-

B) $40,000

C) $90,000.

D) $140,000.

Which of the following statements is incorrect?

A) The acquisition cost of a lease needs to be amortized over the term of lease for both lessee and lessor.

B) Lessor can never depreciate lease hold improvements paid for by rental payments.

C) Code Sec 467 only applies to the rental agreement if it is over $250,000.

D) Business real estate is often referred to as Section 1231 property.

E) All of the statements are incorrect.

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