1. Simon purchased 1,000 shares of ABC stock for $8,000 on April 4. On March 1 he had sold 1,500 shares of ABC stock for $9,000 that he had purchased three months earlier for $15,000. What is Simon’s realized and recognized loss, respectively, on the March 1 stock sale? (Points : 5)
$6,000, $6000
$6,000, 0
$6,000, $4,000
$4,000, $6,000
None of the above
2. Cal exchanges office furniture (fair market value = $100,000; adjusted basis = $90,000) and a business auto (fair market value = $10,000; adjusted basis = $6,000) for fire retardant filing cabinets (fair market value = $110,000; adjusted basis = $80,000). How much gain or loss does Cal recognize on the exchange?
(Points : 5)
0
$4,000 gain on auto
$10,000 gain on furniture
$14,000 total gain
None of the above
3. Cloud Corporation has a taxable income of $100,000 in 2011 along with a $30,000 general business credit. What is the amount of its credit carryover and the last year to which the carryover could be used?
(Points : 5)
$70,000, 2031
$7,750, 2031
$7,750, 2016
$13,125, 2031
4. Which of the following is not a characteristic of a like-kind exchange?
(Points : 5)
The holding period for like-kind property includes the holding period of the property surrendered.
Receipt of boot can cause gain recognition up to the gain realized.
Business realty can be exchanged for business personalty.
Personal-use assets do not qualify for like-kind exchanges.
All are like-kind characteristics.
5. A large corporation had a net long-term capital loss in 2011 and net operating loss in 2011. What are the earliest year(s) to which these losses can be carried?
(Points : 5)
2008 for both
2007 for both
2009 for the capital loss; 2007 for the NOL
2008 for the capital loss; 2009 for the NOL
6. Which of the following would not be considered an involuntary conversion?
(Points : 5)
The theft of jewelry
Sale of property in a flood zone
Condemnation of a building for a highway
Destruction of a home by a tornado
All are involuntary conversions
7. Coho is a corporation that has $1,100,000 of gross revenue and $1,021,000 of deductible expenses? What is its income tax liability?
(Points : 5)
$79,000
$30,494
$26,860
$15,110
None of the above
