QUESTION 11

1. Short-term capital gain is eligible for a special tax rate only when it exceeds long-term capital gain.

   True

   False

QUESTION 12

1. Arthur owns a tract of undeveloped land (adjusted basis of $145,000) which he sells to his son, Ned, for its fair market value of $105,000. What is Arthurs recognized gain or loss and Neds basis in the land?

   	a.	$0 and $145,000.
   	b.	$0 and $105,000.
   	c.	($40,000) and $145,000.
   	d.	($40,000) and $105,000.