Property Plant and Equipment Paper 8

1

Murd Corporation, a domestic corporation, acquired a 90% interest in the Drum Company in 2009 for $30,000. During 2013, the stock of Drum was declared worthless. What type and amount of deduction should Murd take for 2013?






2

If an individual incurs a loss on a nonbusiness deposit as the result of the insolvency of a bank, credit union, or other financial institution, the individual’s loss on the nonbusiness deposit may be deducted in any one of the following ways except:






3

Conner purchased 300 shares of Zinco stock for $30,000 in 2008. On May 23, 2012, Conner sold all the stock to his daughter Alice for $20,000, its then fair market value. Conner realized no other gain or loss during 2012. On July 26, 2012, Alice sold the 300 shares of Zinco for $25,000. What amount of the loss from the sale of Zinco stock can Conner deduct in 2012?






4

Conner purchased 300 shares of Zinco stock for $30,000 in 2008. On May 23, 2012, Conner sold all the stock to his daughter Alice for $20,000, its then fair market value. Conner realized no other gain or loss during 2012. On July 26, 2012, Alice sold the 300 shares of Zinco for $25,000. What was Alice’s recognized gain or loss on her sale?






5

In 2013, Fay sold 100 shares of Gym Co. stock to her son, Martin, for $11,000. Fay had paid $15,000 for the stock in 2009. Subsequently in 2013, Martin sold the stock to an unrelated third party for $16,000. What amount of gain from the sale of the stock to the third party should Martin report on his 2013 income tax return?






6

Among which of the following related parties are losses from sales and exchanges not recognized for tax purposes?






7

On May 1, 2012, Daniel Wright owned stock (held for investment) purchased two years earlier at a cost of $10,000 and having a fair market value of $7,000. On this date he sold the stock to his son, William, for $7,000. William sold the stock for $6,000 to an unrelated person on July 1, 2012. How should William report the stock sale on his 2012 tax return?






8

Al Eng owns 50% of the outstanding stock of Rego Corp. During 2013, Rego sold a trailer to Eng for $10,000, the trailer’s fair value. The trailer had an adjusted tax basis of $12,000, and had been owned by Rego and used in its business for three years. In its 2013 income tax return, what is the allowable loss that Rego can claim on the sale of this trailer?






9

For a cash basis taxpayer, gain or loss on a year-end sale of listed stock arises on the






10

Lee qualified as head of a household for 2012 tax purposes. Lee’s 2012 taxable income was $100,000, exclusive of capital gains and losses. Lee had a net long-term capital loss of $8,000 in 2012. What amount of this capital loss can Lee offset against 2012 ordinary income?






Result

Total Questions:
Correct Answers:
Wrong Answers:
Percentage: