1) Nicole earned a salary of $50,000 in 2015. She had losses of $12,000 in stock trades during the year. She will be able to deduct all of the losses from her income on her 2015 tax return.

True or False

2)A corporation may deduct the interest it pays on its bonds as well as the dividend it pays on its stock.

True or False

3)Maya purchased a vacation home in 2015 for $400,000 with a $350,000 mortgage. She also owns a residence valued at $500,000, and has a $400,000 outstanding balance on the mortgage. Maya may deduct the entire interest on the two mortgages.

True or False

4)If you receive your paycheck on December 31, 2014, but do not deposit it until January 2, 2015, the income is taxable in the year 2015.

True or False

5) Keith purchased a home with $20,000 down payment and a $180,000 mortgage. What is his basis in the home?

a)		$20,000
b)		$180,000
c)		$200,000
D)		$160,000

6) Lucys grandmother purchased 100 shares of GE stock priced at $10/share in 1970. Lucy inherited the stock when her grandmother passed away this year. On the date of death, the stock was valued at $70/share. Lucy sold the stock 3 months later for $73/share. What is the amount of the gain must Lucy report on her tax return (ignoring trading costs)?

A) $63,00

B) $300

C) $7,300

D) $7,000

7) In the scenario above, what is the nature of the gain reported by Lucy?

		A) Shhort-term capital gain
		B) Ordinary income
C)		Long-term capital gain
D)		Qualified dividend

8) In the scenario described in question # 6 above, what is Lucys basis in the inherited stock?

A) $70/share

B) $10/share

C) $63/share

D) $73/share

9) If Lucys grandmother had gifted the stock to Lucy the day before she died (the stock price was $70/share), what would be Lucys basis in the GE stock?

A)		$70/share
B)		$10/share
C)		$63/share
D)		$73/share

10) If Lucy had received the stock by gift as described above, and Lucy had sold the stock 3 months later for $73/share, what is the amount of the gain Lucy must report on her income tax return?

A) $6,300

B) $300

C) $7,300

D) $7,000