Question 1.1.(TCO C) Which of the following is a characteristic of a C corporation?(Points : 5)

Single-level taxation Disregarded as separate from its owners Pass-through taxation to shareholders Limited liability

Question 2.2.(TCO C) Which is true of the provisions of IRC 351?(Points : 5)

Taxpayers must make an election to qualify under IRC 351. It provides for the deferral of gain recognition. It has a control requirement of 50%. It is also known as a like-kind exchange.

Question 3.3.(TCO C) Which of the following is not considered boot?(Points : 5)

Investments Vehicle Cash Nonqualified preferred stock

Question 4.4.(TCO C) Which is true regarding the transfer of liabilities?(Points : 5)

Liabilities transferred in excess of adjusted basis of property transferred causes gain. Liabilities transferred in excess of the original debt causes gain recognition. Liabilities in excess of basis are calculated on an aggregate basis. Cash-basis taxpayers accounts payable is an example of a transfer of a liability.

Question 5.5.(TCO F) IRC 1244 allows for what?(Points : 5)

Nonrecognition on a like-kind exchange Deductibility of losses on certain stock as capital losses Deduction of losses on sale of certain stock as an ordinary loss Ordinary loss treatment up to $25,000

Question 6.6.(TCO C) Krissy Kraus and Manny Martin form K&M Corp. Krissy transfers land with an adjusted basis of $12,000 for stock worth $15,000 and $5,000 cash. Manny transfers a backhoe with an adjusted basis of $30,000 for stock worth $11,000 and $7,000 cash. What is Krissys realized gain/loss? Will she recognize any of that gain/loss? What is Mannys realized gain/loss? Will he recognize any of that loss?(Points : 15)

Question 7.

7.(TCO F) Billy Barker, a married taxpayer, has basis in IRC 1244 stock of $120,000. Billy sells the stock for $50,000. What is his gain or loss? How much is ordinary? How much is capital?(Points : 20)