starting a new single sided sheet for each question. (In other words, please don't try to answer more than one question on a single page.) For questions 46-49, circle your final answers and bind all pages together. Please DO NOT staple your scantron. Be sure to follow all instructions provided in the exam overview pertaining to this part of the exam. Good luck! 1. Business depreciable property placed in service prior to what year is not eligible for ACRS depreciation? a. 1978 b. 1980 c. 1981 d. 1982 2. When property that is subject to an existing debt is purchased, the basis of the property is the amount of cash paid initially plus the unpaid debt to which the property is subject. 3. During 2005, Carla received a gift of property having a fair market value of $25,000 at the time of the gift. The donor's adjusted basis in the property at the time of the gift was $21,000. The donor paid a gift tax of $700 on the property. Carla's basis in the property is $21,700. 4. When new stock received as a dividend is identical to the old stock on which the dividend is declared, the adjusted basis of the old stock must be apportioned among the shares of old stock and the shares of new stock received as a dividend. 5. If nontaxable stock rights are allowed to expire, they have no basis. 6. Richard Rendon sold his warehouse at a loss to his brother. The loss is deductible by Richard. 7. The adjusted basis of property is its cost plus capital recoveries less capital expenditures. 8. The basis of property acquired by inheritance is the lower of the decedent's adjusted basis or the fair market value on the date of the death of the decedent. 9. Gains are recognized on sales involving property used for business or income-producing purposes or for personal purposes. 10. Depreciation, depletion, amortization, and acquisition costs