1-

Which of the following is true with respect to the related party rules?

a.A disallowed loss on a related party transaction can be used to offset any future gain when the property is sold to an unrelated party.

b.A taxpayer's uncle is a related party for purposes of Section 267.

c.Bill sells stock to his sister for a $3,000 loss. Bill can deduct the loss on his tax return.

d.Under the constructive ownership rules of Section 267, a shareholder owns 10 percent of the stock owned by a corporation in which he or she is a shareholder.

e.None of these choices are true

2-

Which of the following is a capital asset?

a.Accounts receivable held by a dentist

b.Inventory held by a manufacturer

c.All property owned by a taxpayer other than property specifically noted in the law as an exception

d.Depreciable property and real estate used in a trade or business

3-

Steve Corp bought a $600,000 apartment building in June of 2015. Of the purchase price, $104,950 is allocated to the value of the land. What is the maximum amount of depreciation that the company can claim in 2016 (year 2) for the building?

a.$18,000

b.$25,000 under the election to expense business property

c.$9,752

d.$21,816

e.You cannot depreciate property costing over $500,000.