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