This preview shows page 1. Sign up to view the full content.
Unformatted text preview: bought in January 1990 at a cost of $5,000 for 100 shares of Rook
Corp. common stock having a fair market value of $6,000. Gow's recognized gain on this exchange was:
d. $1,000 long-term capital gain.
$1,000 short-term capital gain.
$1,000 ordinary income.
Choice "d" is correct. $0. Gow's recognized gain or the exchange of stock pursuant to a plan of
corporate reorganization was $0.
Rule: No gain or loss is recognized if stock or securities in a corporation which is "a party to a
reorganization" are exchanged solely for stock in that corporation or in another corporation which is "a
party to a reorganization." The exchange must be made pursuant to a "plan of reorganization."
Choices "a", "b", and "c" are incorrect, per the above rule. CPA-02263 Type1 M/C 130. CPA-02263 A-D May 91 II #57 Corr Ans: C PM#36 R 3-99 Page 53 After a corporation's status as an S corporation is revoked or terminated, how many years is the
corporation required to wait before making a new S election, in the absence of IRS consent to an earlier
View Full Document
This note was uploaded on 06/14/2013 for the course ACCOUNTING Regulation taught by Professor Becker during the Fall '10 term at Keller Graduate School of Management.
- Fall '10
- The Land