QUESTION 1 On 6/10/x9, Dan and six individuals organized T Corp. and each received the following shares of T Corp. voting stock: Dan's Father: 2200 Dan's Mother: 3200 Dan: 1600 Dan's sister: 4000 Dan's Grandfather: 3200 Dan's friend John: 4800 Dan's Wife: 1000 During the current tax year, T Corp. redeemed 1500 of the shares held by Dan for $20,000, 100 of his mother's shares, 300 of John's shares and 100 shares held by Dan's father. Dan had a basis in the redeemed T Corp. stock of $1,000. Before the redemption, Dan owns the following percentage of T Corporation: O 1.76 O 2.60 O 3. None of these O 4.40 QUESTION 2 On 6/10/X9, Dan and six individuals organized T Corp. and each received the following shares of T Corp. voting stock: Dan's Father: 2200 Dan's Mother: 3200 Dan: 1600 Dan's sister: 4000 Dan's Grandfather: 3200 Dan's friend John: 4800 Dan's Wife: 1000 During the current tax year, T Corp. redeemed 1500 of the shares held by Dan for $20,000, 100 of his mother's shares, 300 of John's shares and 100 shares held by Dan's father. Dan had a basis in the redeemed T Corp. stock of $1,000. The redemption by Dan will qualify as a sale or exchange for tax purposes per Code Section 302(b)(2) if Dan owns less than the following percentage of T Corporation after the redemption: O 1. None of these O 2. O3. 60.8 O 4. 32 48 QUESTION 6 X Co. adopts a plan of complete liquidation and makes the following pro rata distributions to its shareholders (assume all are individuals): A: Cash $70,000 B: Inventory FMV $20,000 Basis $20,000 Mortgage $10,000 C: Inventory FMV $30,000/ Basis $15,000/ Mortgage $40,000 D: Capital asset FMV $500/ Basis $2,800 (Assume that X Co. acquired the property distributed to D in a Sec. 351 transfer 6 months before adopting the plan of liquidation when the FMV of the property was $800 and X co.'s basis was $2,800) E: Capital asset FMV $10,000 /Basis $ 4,000 Each shareholder had a $1,000 basis in the X Co. stock. X Co.'s recognized gain or loss on the distribution to B is $20,000 ordinary income 0 $10,000 ordinary income None of these O 3, QUESTION 7 X Co. adopts a plan of complete liquidation and makes the following pro rata distributions to its shareholders (assume all are individuals): A: Cash $70,000 B: Inventory FMV $20,000 Basis $20,000 Mortgage $10,000 C: Inventory FMV $30,000/ Basis $15,000 Mortgage $40,000 D: Capital asset FMV $500 Basis $2,800 (Assume that X Co. acquired the property distributed to D in a Sec. 351 transfer 6 months before adopting the plan of liquidation when the FMV of the property was $800 and X co.'s basis was $2,800) E: Capital asset FMV $10,000 Basis $4,000 Each shareholder had a $1,000 basis in the X Co, stock. X Co.'s recognized gain or loss on the distribution to C is O 1. $25,000 ordinary income O 2. $65,000 ordinary income O 3.None of these O 4. $35,000 ordinary income QUESTION 8 X Co. adopts a plan of complete liquidation and makes the following pro rata distributions to its shareholders (assume all are individuals) A: Cash $70,000 B: Inventory FMV $20,000 Basis $20,000 Mortgage $10,000 C: Inventory FMV $30,000 Basis $15,000 Mortgage $40,000 D: Capital asset FMV $500 Basis $2,800 (Assume that X Co. acquired the property distributed to D in a Sec. 351 transfer 6 months before adopting the plan of liquidation when the FMV of the property was $800 and X co.'s basis was $2,800) E: Capital asset FMV $10,000/Basis $ 4,000 Each shareholder had a $1,000 basis in the X Co. stock. X Co.'s recognized gain or loss on the distribution to D is O1. capital loss None of these QUESTION 9 X Co. adopts a plan of complete liquidation and makes the following pro rata distributions to its shareholders (assume all are individuals) A: Cash $70,000 B: Inventory FMV $20,000 Basis $20,000 Mortgage $10,000 C: Inventory FMV $30,000 Basis $15,000 Mortgage $40,000 D: Capital asset FMV $500 Basis $2,800 (Assume that X Co. acquired the property distributed to D in a Sec. 351 transfer 6 months before adopting the plan of liquidation when the FMV of the property was $800 and X co.'s basis was $2,800) E: Capital asset FMV $10,000/Basis $ 4,000 Each shareholder had a $1,000 basis in the X Co. stock. X Co.'s recognized gain or loss on the distribution to E is 0 O2.$6,000 capital gain O3.$10,000 capital gain None of these QUESTION 10 X Co. adopts a plan of complete liquidation and makes the following pro rata distributions to its shareholders (assume all are individuals): A: Cash $70,000 B: Inventory FMV $20,000 Basis $20,000 Mortgage $10,000 C: Inventory FMV $30,000/Basis $15,000 Mortgage $40,000 D: Capital asset FMV $500 / Basis $2,800 (Assume that X Co. acquired the property distributed to D in a Sec. 351 transfer 6 months before adopting the plan of liquidation when the FMV of the property was $800 and X co.'s basis was $2,800) E: Capital asset FMV $10,000 Basis $4,000 Each shareholder had a $1,000 basis in the X Co. stock. The gain or loss recognized by A is O2. $69,000 capital gain O 3. None of these. O 4. $1,000> capital loss QUESTION 11 X Co. adopts a plan of complete liquidation and makes the following pro rata distributions to its shareholders (assume all are individuals): A: Cash $70,000 B: Inventory FMV $20,000/ Basis $20,000 Mortgage $10,000 C: Inventory FMV $30,000 Basis $15,000 Mortgage $40,000 D: Capital asset FMV $500 Basis $2,800 (Assume that X Co. acquired the property distributed to D in a Sec. 351 transfer 6 months before adopting the plan of liquidation when the FMV of the property was $800 and X co.'s basis was $2,800) E: Capital asset FMV $10,000 Basis $ 4,000 Each shareholder had a $1,000 basis in the X Co. stock. The gain or loss recognized by B is 1.$19,000 capital gain 2.0 O3. $9,000 capital gain 4. None of these