1) Assume the client purchased 100 shares of stock in XYZ Corporation for $300 in 20X1. On 12/20/X2, the client purchased an additional 100 shares in the company for $200. On 12/27/X2, the client sold the 100 shares acquired in 20X1 for $210. Since a purchase of substantially identical securities occurred only 7 days earlier, the loss of $90 on 12/27/X2 cannot be deducted. Instead, under the wash sale rules: A. the basis of the shares acquired on 12/20/X2 is increased by $90 to $300. B. the basis of the shares acquired on 12/20/X2 is increased by $200 to $210. C. the basis of the shares acquired on 12/20/X2 is increased by $290 to $300. D. the basis of the shares acquired on 12/20/X2 is increased by $90 to $290. . 2) A taxpayer owns business property that is destroyed in a fire on 12/10/X1. The insurance company makes payment for the fair market value of the property (which exceeds its tax basis) on 1/20/X2. The taxpayer can defer the gain if all of the proceeds are used to replace the property by 12/31/X4. If the fire was part of a gigantic blaze that caused the president to declare the area a federal disaster area, the taxpayer has until A. 12/31/X2 to replace the property B, 12/31/X4 to replace the property C. 12/31/X6 to replace the property D. 12/31/X8 to replace the property