Please answer the following! Thank you!!

Question 7 (1 point)

Alicia owns Advertising Solutions, Inc. (ASI) and sells 100% of the company stock on January 2 of this year to an ESOP for $2,000,000. Alicia had an adjusted basis in the ASI stock of $150,000. She purchased the stock on July 3, 2001. Which of the following statement(s) are true?

1. Alicia will not recognize long-term capital gain or ordinary income this year if she reinvests the proceeds of the sale in qualified replacement securities within 12 months.

2. Alicia must recognize $1,850,000 of long-term capital gain at the time of the sale to the ESOP.

3. If Alicia dies before selling the qualified replacement securities when the fair market value of those qualified replacement securities is $4,000,000, her heirs will have an adjusted basis in the qualified replacement securities of $2,150,000.

Question 7 options:

	a. 1 only
	b. 2 only
	c. 1 and 3
	d. None of these statements are true

Question 8 (1 point)

Randy terminates employment in August of Year 6 and takes a distribution from the plan consisting of 975 shares of XYZ, Inc., having a fair market value of $24,000. If Randy sells the stock for $40,000 six months after receiving the distribution, which of the following statements are true?

1. Randy has ordinary income of $14,382 in year 6. 2. Randy has long term capital gain of $24,000 in year 6. 3. Randy has long term capital gain of $8,125 in year 6. 4. Randy has a short term capital gain of $16,000 in year 7

Question 8 options:

	a. 1 Only
	b. 4 Only
	c. 3 and 4
	d. 2 and 4

Question 9 (1 point)

Which of the following is not a requirement for the owner of corporate stock who sells to an ESOP to qualify for the nonrecognition of gain treatment?

Question 9 options:

	a.The ESOP must own at least 55% of the corporations stock immediately after the sale.
	b. The owner must reinvest the proceeds from the sale into qualified replacement securities within 12 months after the sale.
	c. The ESOP may not sell the stock within three years of the transaction unless the corporation is sold.
	d. The owner must not receive any allocation of the stock through the ESOP.