Joe’s Aunt Sally dies on 6/10/21. Joe’s Aunt bequests him XYZ stock that has a fair market value of $32,000 on 6/10/21. The stock is distributed to him on 11/20/21 when it has a fair market value of $37,000. The fair market value of the stock on 12/10/21 was $43,000. His Aunt’s basis in the stock was $40,000.

a) Joe sells the stock two months after the distribution for $47,000. The alternative valuation date was not elected. What does Joe recognize on his tax return with respect to this transaction?

b) Joe sells the stock two months after the distribution for $47,000. The alternative valuation date was elected. What does Joe recognize on his tax return with respect to this transaction?

Dan wishes to determine if Thomas meets the requirements of a dependent on his 2021 federal income tax return. What 6 tests must be satisfied in order for Dan to treat Thomas as a dependent under the qualifying child test?

Sara is the sole shareholder of Lee Corporation. During 2021, Lee Corporation distributes $300,000 in cash to Sara. Lee Corporation's E&P was $120,000 prior to this distribution. Sara's basis in Lee Corporation was $100,000 prior to this distribution. How will Sara treat this distribution on her 2021 tax return?

During the taxable year, Kay receives the following interest income amounts:

$4,000 on US Treasury Bonds

$500 on a late payment for the prior year's federal refund

How much of this interest income is includable on her tax return?

		$0
		$4,500
		$4,000
		$500