No taxable income results from a stock split

QUESTION 1 No taxable income results from a stock split.QUESTION 2 A loss incurred on the sale of a personal residence is not deductible.QUESTION 3 If a taxpayer cannot specifically identify which shares of stock were sold, theaverage cost of all shares held is used as the adjusted basis of the sharesthat were sold.QUESTION 4 The taxpayer’s basis in gifted property depends on whether the fair marketvalue of the gifted property is greater than or less than the donor’s adjustedbasis in the property.QUESTION 5 The like-kind exchange rules are elective.QUESTION 6 Years ago, Fran purchased stock in ABC company for $33,000. Last year, Fransold the stock to her son, Steve, for $25,000 (its current market value). Stevelater sells the shares for $20,000. Steve’s adjusted basis in the stock and hisrecognized gain or loss on the sale are:$33,000adjustedrecognized loss$33,000adjustedrecognized loss$25,000adjustedrecognized loss$25,000adjustedrecognized loss$33,000adjustedgain basis, $13,000basis, $5,000basis, $13,000basis, $5,000basis, $0 recognized QUESTION 7 Patty converted her main home to rental property two years ago when itwas worth $70,000. Patty paid $85,000 for the house. What is Patty’sbasis in the house if after taking $10,000 of depreciation deductions shesells it for $66,000? $60,000$66,000$70,000$75,000$85,000 QUESTION 8 Clara sold 200 shares of ABC stock for $22,500. Clara’s investmentportfolio includes the following purchases of ABC stock:2006200820122013 100 shares at $100per share50 shares at $110 pershare125 shares at $130per share75 shares at $125 pershare Assuming Clara does not identify which shares she sold, she willrecognize:no gain orloss.a $500 gain.a $1,000 loss.a $3,125 loss.none of theabove.QUESTION 9 Mr. and Mrs. Axelson sold their main home in January 2015 for $325,000.Selling expenses were $20,000. The Axelsons purchased the house 30years ago for $40,000. The gain reported on the Axelsons’ joint tax returnis: $0.$15,000.$35,000$265,000.none of theabove.1 points QUESTION 10 Riley exchanged an apartment building with an adjusted basis of$100,000 and a fair market value of $200,000 for a rental house valued at$180,000 and cash of $20,000. What is Riley’s recognized gain and basisof the rental beach house?$0 and $100,000$0 and $180,000$20,000 and$100,000$20,000 and$180,000None of theabove1 points QUESTION 11 Which of the following is not taken into consideration in computing theseller’s amount realized from the exchange of property?Debt that the buyer assumesCommissions paid by the sellerLegal fees paid by the seller in conjunction with the saleAll of the above are taken into consideration in computingamount realizedNone of the above are taken into consideration in computingamount realized1 points QUESTION 12 A taxpayer pays $200,000 for real property. The market value of the landand building purchased are $120,000 and $180,000, respectively. Thetaxpayer’s basis in the land and building are:$120,000 and $180,000,respectively. $180,000 and $120,000,respectively.$120,000 and $80,000,respectively.$80,000 and $120,000,respectively.None of the above.1 points QUESTION 13 Several years ago, Kurt paid $15,000 for 1,000 shares of stock in ABC.During the current year ABC declares a three-for-one stock split. Shortlythereafter, Kurt sells 1,000 shares of ABC stock for $12,000. Hisrecognized gain on the sale of the 1,000 shares is:$7,000.$2,000.$0.$12,000.$5,000.1 points QUESTION 14 Joel’s main home is destroyed in a tornado in a federally declared disasterarea. The insurance company compensates Joel for his loss in 2015, whichproduces a $350,000 realized gain. How long does Joel have to purchase anew principal residence and avoid being taxed on the gain?December2015December2016December2017December2018December2019 31,31,31,31,31,1 points QUESTION 15 Yang converted her personal residence to rental property ten years ago.At the time of conversion, the fair market value of the house was $60,000.After taking depreciation deductions of $12,000, Yang sells the house for$68,000. If Yang paid $50,000 for the house, her adjusted basis in thehouse is:$30,000.$38,000.$48,000.$50,000.$60,000.1 points QUESTION 16 Nate sold his main home for $400,000. He paid commissions totaling$20,000. Nate, who is single, purchased the home 15 years ago for$110,000. Over the years, he has spent $13,000 on improvements and$22,000 on repairs to the home. Nate’s recognized gain is:$0$20,000.$7,000.$270,000.$257,000.QUESTION 17 A taxpayer cannot recognize the loss on the sale of stock if the taxpayerpurchases substantially identical stock within 60 days before or 60 daysafter the sale.True or False?QUESTION 18A taxpayer’s grocery store was destroyed by a tornado in March. The adjusted basis ofthe store was $300,000. In April, the insurance company paid $400,000 to cover the loss. If the taxpayer wants to postpone as much gain as possible, $____________ must beinvested in qualified replacement property. QUESTION 19 If no gift tax is paid on the transfer, the basis of appreciated propertyacquired as a gift is the donor’s basis.True or False?QUESTION 20 Taxpayers have two years from the date of the involuntary conversion toreinvest the proceeds if they intend to avoid recognizing the realized gain.True or false?QUESTION 21 In a like-kind exchange, the amount of recognized gain equals the amount ofboot received.True or False?QUESTION 22 Legal fees paid in connection with the purchase of property are subtractedfrom the buyer’s basis in the property.True or False?QUESTION 23 Only stock held at least 10 years qualifies for the exclusion on the sale ofSection 1202 (small business) stock.True or False?QUESTION 24 A disallowed loss resulting from a sale between related parties is added tothe buyer’s basis in the property acquired.True or False? QUESTION 25The alternative valuation date is ____________ after the date of the decedent’s death. QUESTION 26To qualify for the exclusion of the gain from the sale of a main home, the home must have been used asthe taxpayer’s main home for ____________ of the past____________ years. QUESTION 27An old business truck with an adjusted basis of $2,000 is traded in on a new businesstruck with a FMV of $21,000. The dealer agrees to a $4,000 trade-in allowance on the oldtruck plus $17,000 cash. The basis of the new truck is $____________. 1 points QUESTION 28A taxpayer inherited 25 shares of XYZ stock from his father in 2001. The stock had cost$2,500 but was worth $3,000 at the date of the father’s death. No estate tax return wasfiled. If the stock is sold for $2,800 in 2015, the taxpayer recognizes a $____________ gain/(loss). 1 points (Extra Credit) QUESTION 29A taxpayer received 25 shares of ABC stock as a gift. The donor’s basis in the stock was$2,500, and the market value of the stock at the time of the gift was $3,000. No gift taxwas paid. If the stock is sold for $2,800, the taxpayer recognizes a $____________ gain/(loss). 1 points (Extra Credit) QUESTION 30On May 1, 2015, a taxpayer purchased 100 shares of LMX stock for $5,000. On May 20,2015, the taxpayer sold 100 shares of LMX stock for $4,800. The shares that were soldwere purchased 10 years ago for $10,000. The taxpayer’s basis in the remaining 100shares of LMX stock (bought on May 1, 2015) is $____________.

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