Question 1

John purchases all of the common stock of Clarke Corporation for $280,000.The assets of the corporation are:   ​
What is John's basis in the common stock he acquired?

Accepted Answer

A) $195,000 
B) $215,000 
C) $225,000 
D) $250,000 
E) $280,000 
A) $195,000 
B) $215,000 
C) $225,000 
D) $250,000 
E) $280,000

Question 2

Sonya inherits 1,000 shares of Big Red Airline Corporation stock from the estate of her Uncle Tony.Tony died on August 4,2016.The stock's value on August 4,2016,is $2,000.Tony purchased the stock for $3,000 several years ago.Sonya sells the 1,000 shares for $2,300 on December 8,2016.What is Sonya's holding period of the stock?

Accepted Answer

A) Short-term. 
B) Long-term. 
C) Depends on which value is used. 
D) Depends on whether an estate tax was paid. 
A) Short-term. 
B) Long-term. 
C) Depends on which value is used. 
D) Depends on whether an estate tax was paid.

Question 3

Valerie receives a painting as a gift from her aunt.The painting is valued at $6,000 on the date of the gift.Valerie's aunt's basis in the painting is $13,000.Three years later Valerie sold the painting for $8,000.What is the amount of gain or (loss)recognized by Valerie on the sale?

Accepted Answer

A) No gain or (loss) is recognized 
B) $5,000 loss 
C) $2,000 gain 
D) $7,000 loss 
E) $2,000 loss 
A) No gain or (loss) is recognized 
B) $5,000 loss 
C) $2,000 gain 
D) $7,000 loss 
E) $2,000 loss

Question 4

Samantha receives 100 shares of Burnet Corporation stock as a gift from her cousin.At the date of the gift the stock is valued at $60 per share.It cost her cousin $10 per share several years before.One month later,Samantha's uncle dies and she inherits 100 shares of Crockett Corporation stock from her uncle's estate.The stock cost her uncle $10 per share twenty-five years ago.On the date of death the stock has a value of $60 per share.Samantha needs money to invest in her business,but she does not need to sell both blocks of stock this year.Which stock would you recommend Samantha to sell? (Assume any long-term capital gains would be taxed at 15%.)

Accepted Answer

The basis of the inherited property take

Question 5

Match each statement with the correct term below.
-Carryover basis

Accepted Answer

A) Begins on the day after acquisition and ends on the day of disposition. 
B) The initial investment in an asset. 
C) An asset's basis transfers from one owner to another. 
D) The capital investment remaining in an asset at the date of its disposition. 
E) Sales price less expenses of disposition.
F)A purchase of all of the assets of a business.
G)Amount realized is less than adjusted basis.
H)A purchase of all of the assets of a business by buying the stock of a corporation.
I)A term used to identify a situation in which an asset has a different basis for determining gain than for determining loss.
J)The date of death used to value a decedent's estate in the absence of any special election.
K)Six months after the date of death, used to value a decedent's estate when the executor of the estate makes election.
L)Amount realized is greater than adjusted basis. 
A) Begins on the day after acquisition and ends on the day of disposition. 
B) The initial investment in an asset. 
C) An asset's basis transfers from one owner to another. 
D) The capital investment remaining in an asset at the date of its disposition. 
E) Sales price less expenses of disposition.
F)A purchase of all of the assets of a business.
G)Amount realized is less than adjusted basis.
H)A purchase of all of the assets of a business by buying the stock of a corporation.
I)A term used to identify a situation in which an asset has a different basis for determining gain than for determining loss.
J)The date of death used to value a decedent's estate in the absence of any special election.
K)Six months after the date of death, used to value a decedent's estate when the executor of the estate makes election.
L)Amount realized is greater than adjusted basis.

John purchases all of the common stock of Clarke Corporation for $280,000.The assets of the corporation are: What is John's basis in the common stock he acquired?

Valerie receives a painting as a gift from her aunt.The painting is valued at $6,000 on the date of the gift.Valerie's aunt's basis in the painting is $13,000.Three years later Valerie sold the painting for $8,000.What is the amount of gain or (loss)recognized by Valerie on the sale?

Match each statement with the correct term below. -Carryover basis

Federal Income Taxation-An Overview

Income Tax Concepts

Income Sources

Income Exclusions

Introduction to Business Expenses

Business Expenses

Losses-Deductions and Limitations

Taxation of Individuals

Cost Recovery on Property: Depreciation, depletion, and Amortization

Property Dispositions

Non-Recognition Transactions

Choice of Business Entity-General Tax and Nontax Factorsformation

Choice of Business Entity-Operations and Distributions

Choice of Business Entity-Other Considerations

Tax Research

Filters

Exam 9: Acquisitions of Property

John purchases all of the common stock of Clarke Corporation for $280,000.The assets of the corporation are: ​ What is John's basis in the common stock he acquired?

Valerie receives a painting as a gift from her aunt.The painting is valued at $6,000 on the date of the gift.Valerie's aunt's basis in the painting is $13,000.Three years later Valerie sold the painting for $8,000.What is the amount of gain or (loss)recognized by Valerie on the sale?

Match each statement with the correct term below. -Carryover basis

Federal Income Taxation-An Overview

Income Tax Concepts

Income Sources

Income Exclusions

Introduction to Business Expenses

Business Expenses

Losses-Deductions and Limitations

Taxation of Individuals

Cost Recovery on Property: Depreciation, depletion, and Amortization

Property Dispositions

Non-Recognition Transactions

Choice of Business Entity-General Tax and Nontax Factorsformation

Choice of Business Entity-Operations and Distributions

Choice of Business Entity-Other Considerations

Tax Research

Filters

John purchases all of the common stock of Clarke Corporation for $280,000.The assets of the corporation are: What is John's basis in the common stock he acquired?