1) Assume the client purchased 100 shares of stock in LYS Corporation for $300 in 2021.On 12/20/22, the client purchased an additional 100 shares in the company for $200. On 12/27/22, the client sold the 100 shares acquired in 2021 for $210. Since a purchase of substantially identical securities occurred only 7 days earlier, the loss of $90 on 12/27/22 cannot be deducted. Instead, under the wash sale rules:

A. the basis of the shares acquired on 12/20/22 is increased

by $90 to $300.

B. the basis of the shares acquired on 12/20/22 is increased

by $200 to $210.

C. the basis of the shares acquired on 12/20/22 is increased

by $290 to $300.

D. the basis of the shares acquired on 12/20/22 is increased

by $90 to $290.

.2) A taxpayer owns business property that was destroyed in a fire on 12/10/21. The insurance company makes payment for the fair market value of the property (which exceeds its tax basis) on 1/20/22. The taxpayer can defer the gain if all of the proceeds are used to replace the property by 12/31/24. 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. 12/31/22 to replace the property

B, 12/31/24 to replace the property

C. 12/31/26 to replace the property

D. 12/31/28 to replace the property

3) If Wilson owned a home for the last 5 years and used it as a personal residence for the first year, rented it out for the next 3 years, and then moved back in for the last year, the exclusion would be reduced by 3/5 for the period of non qualified use. Thus, if Wilson has a gain of $100,000 on the sale,

A) he can exclude only 2/5 of it from his gross income, or $40,000, and must recognize the other $60,000.

B) he must include all of the gain in his income

C) he can exclude the entire $100,000

D) none of the above are correct

4) Assume that the client purchases an office building on 11/1/21 for $500,000, which includes land with a value of $32,000. The cost of the building itself is $500,000 $32,000 = $468,000, and this is recovered over a 39-year period, resulting in MACRS deductions of $468,000 / 39 years = $12,000 per year. In 2021, the year of acquisition, the property is treated as having been purchased in the middle of November, so that only 1 months of depreciation are claimed that year. What is the amount of the depreciation deduction for 2021?

A. $1,000

B. $1,500

C. $12,000

D. $6,000