1. In the year incurred, passive loss generally:

   		Are not deductible
   		Are deductible only when they exceed portfolio losses
   		Are deductible only against passive income
   		All of the above
   		None of the above

1.3334 points

QUESTION 63

1. Acme, an S corporation since inception, makes a distribution to its sole shareholder, Sam, of $75,000 when Sam's adjusted basis in his stock of Acme is $100,000. As a result Sam has:

   		Zero gross income
   		$75,000 of gross income taxable at ordinary rates
   		A taxable dividend at capital gains rates of $75,000
   		A $25,000 loss
   		None of the above

1.3334 points

QUESTION 64

1. George owns all the stock of Acme, Inc. (adjusted basis of $30,000) as an investment. If he receives a distribution from Acme of $75,000 when corporate accumulated earnings and profits are $10,000, and current earnings and profits are $15,000, He has

   		$25,000 dividend,
   		$30,000 Return of Capital
   		$20,000 Capital Gain
   		All of the abov