10) David owns 100% of Z co. David and his daughter, Sally, managed Z co. since its founding in 1980. David plans to retire so he gives 50% of Z co. to Sally as a gift. David's gift of stock to Sally was for the purpose of giving her complete ownership and control of Z co.

One year after the gift David retired and Z co. redeemed all his remaining shares. David filed a waiver of family attribution and reported the redemption as a sale or exchange. Which statement is true?

	a.	The waiver is ineffective as Sally acquired the stock from David within 10 years of the redemption.
	b.	The waiver is ineffective as Sally received the stock as a gift, but would have been effective if she purchased the stock at fair market value.
	c.	None of these is true.
	d.	The waiver is effective despite the fact that Sally acquired the stock from David within 10 years of the redemption as there is no tax avoidance.
	e.	More than one of these is true.

11)

In order to satisfy the safe harbor provisions of Code 302(b)(4) with respect to partial liquidations:

	a.	The terminated trade or business must have been actively conducted only by the corporation being partially liquidated throughout the five year period ending on the date of redemption and cannot have been acquired during such period in a taxable transaction. If it was acquired in a nontaxable reorganization, the years the business was actively conducted by the other corporation are not counted toward the required five year period.
	b.	The redeemed stock must be held by a person other than a corporation.
	c.	More than one of these is true.
	d.	Constructive ownership rules are applicable.
	e.	None of these are true.

12) A owned 100% of X co. A sold 40% of X co. to B, an unrelated individual. Shortly thereafter, X co. redeemed the remaining shares held by A as part of A's overall plan to divest himself of his X co. stock. A must report:

	a.	More than one of these.
	b.	Capital gain or loss with respect to the sale and redemption.
	c.	Capital gain or loss with respect to the sale, but if the redemption had preceded the sale, then dividend with respect to the redemption.
	d.	Capital gain or loss with respect to the sale and dividend with respect to the redemption since it was subsequent to the sale.
	e.	None of these.

13)

X co. is owned equally by two individuals, A and B. How many of the following scenarios will result in constructive dividend income to A?

(i) A buys all of B's stock on credit, and X co. thereafter assumes and pays A's liability on the note.

(ii) A unconditionally agrees to buy all of B's X co. stock, but before A or B performs under the agreement, the purchase contract is assigned to X co., which redeems the stock from B.

(iii) X co. agrees to redeem B's stock in the event of his death or retirement, but if X is unable to perform, A agrees to make the purchase. X co. redeems B's stock.

(iv) In the event B dies or retires from the business, A has the right, but not the duty, to buy B's stock at a fixed price. A assigns his option to X co. and X co. purchases B's stock.

	a.	3
	b.	None of these.
	c.	2
	d.	1