QUESTION 79

1. If insurance proceeds are received, a casualty transaction can result in recognized gain.

   True

   False

1 points

QUESTION 80

1. The tax law requires that capital gains and losses be separated from other types of gains and losses because an alternative tax calculation may be used when taxable income includes net long-term capital gain.

   True

   False

1 points

QUESTION 81

1. A partnership's tax year may be dependent upon the tax years of its partners.

   True

   False

1 points

QUESTION 82

1. Acme Corporation, a regular domestic C Corporation, distributes 100,000 to Adam, its sole shareholder, when both its current and accumulated earnings a profits are Zero, and Adam's Adjusted Basis in his shares is $25,000. Adam's stock is a capital asset in his hands. As a result Adam will report a Long Term Capital Gain of $75,000.

   True

   False

1 points

QUESTION 83

1. An accrual basis taxpayer collects January 2020 rent in December 2019. He must report the rent in:

   		2019
   		2020
   		at his option 2019 or 2020
   		none of the above

1 points

QUESTION 84

1. An accrual basis landlord collects one month of security from a tenant in December 2019. In 2021 the tenant fails to pay the rent, and the landlord and he applies the security to rent for that month. As a result the landlord must report the amount of the security:

   		As income in 2019
   		As income in 2021
   		As a loss in 2021
   		as excluded from income in any of the years from 2019 to 2021
   		None of the above

1 points

QUESTION 85

1. Oscar sells his personal use car to Adam, receiving in return $3800.00 in cash and a motorcycle worth $1500.00. Oscars adusted basis in the car was $2500.00 as the time of the sale. Oscars Gain Realized on the sale is:

   		3800.00
   		1500.00
   		5,300.00
   		2800.00
   		None of the above

1 points

QUESTION 86

1. Increases in the value of capital assets have no tax effect until the asset is disposed of.

   True

   False

1 points

QUESTION 87

1. Original issue discount is amortized over the life of a bond.

   True

   False

1 points

QUESTION 88

1. Quail Corporation is a C corporation with net income of $400,000 during 2020. If Quail paid dividends of $140,000 to its shareholders, the corporation must pay tax on $260,000 of net income. Shareholders must report the $140,000 of dividends as income.

   True

   False

1 points

QUESTION 89

1. Smith sells his business truck for 5,000 cash, relief from his auto loan of 3,000 and a sailboat with a FMV of 4,000. Smith's originally purchased the truck for 50,000, and has properly taken 40,000 depreciation until the date of sale. As a result, smith will Realize a:

   		Loss of 45,000
   		Loss of 38,000
   		Gain of 2,000
   		Zero Gain or Loss
   		None of the above.