treated as owning 5 percent of the stock in that corporation stock owned by the

Treated as owning 5 percent of the stock in that

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treated as owning 5 percent of the stock in that corporation. stock owned by the taxpayer’s spouse, descendants, ancestors, or siblings is treated as owned by the b. taxpayer. a taxpayer may be treated as owning stock that is actually owned by another person or entity in which c. the taxpayer has an ownership interest. both a and c. d. all of the above. e.
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544 CCH Federal Taxation—Basic Principles Chapter 10 © 2010 CCH. All Rights Reserved. When a taxpayer realizes a loss on the sale of securities and purchases the same or substantially identical 67. securities within 61 days surrounding the date of the sale, this is known as: a related-party transaction. a. a wash sale. b. a basket purchase. c. none of the above. d. When taxpayers sell property in an installment sale and realize gain, they generally recognize the gain:68. in the first year in which an installment payment is received. a. d. In 2006, Jane Jones pays $2,500 for 1,000 shares of ABC common stock. On August 27, 2010, Jane 69. purchases an additional 250 shares of ABC common stock for $600. On September 5, 2010, she sells the 1,000 shares purchased in 2006 for $1,800. Jane’s recognized loss on the sale is: e. In 2006, Jane Jones pays $2,500 for 1,000 shares of ABC common stock. On August 27, 2010, Jane 70. purchases an additional 250 shares of ABC common stock for $600. On September 5, 2010, she sells the 1,000 shares purchased in 2006 for $1,800. Jane’s basis in the shares of stock purchased on August 27, 2010 is: e. Becky Bell owned common stock in a corporation that she purchased two years ago for $25,000. On June 71. 6, 2010, Becky sold the stock for its $11,000 fair market value to her son, Max Monroe. On December 19, 2010, Max sells the stock to an unrelated party for its $13,000 fair market value. How much gain or loss will Becky and Max recognize on their respective income tax returns for 2010?$0 and $0, respectively. a. ($14,000) and $0, respectively. b. ($14,000) and $2,000, respectively. c. $0 and $2,000, respectively. d. None of the above. e. North Enterprises sells land for $15,000 cash and machinery worth $20,000. The other party’s adjusted basis 72. in the machinery is $8,000. The land was subject to a $25,000 mortgage, which the other party assumes. North incurs $2,000 of selling expenses on the sale. What is North’s amount realized from the sale?
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545 Testbank
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