1. Shareholders are never allowed to recognize losses on a liquidating distribution.

   		a. true.
   		b. false.

2. Serena (an individual) owns 90% of the SYZ Corporation. The other 10% of SYZ is owned by the ABC Corporation. If Serena liquidates the SYZ Corporation, will she be able to defer any of the gain realized on the liquidation under Section 332 (Parent/subsidiary liquidation).

		a. Yes
		b. No

3. The Pennypincher Corporation has 100 shares of stock outstanding owned by the following taxpayers.

Mr. Penny 30

Mrs. Penny (Mr. Pennys wife) 10

John (the Pennys son) 10

Abby (the Pennys granddaughter) 10

Buddy Penny (Mr. Pennys brother) 20

P&P Partnership (Mr. Penny is a 20% partner) 10

PPP Corporation (Mr. Penny is a 70% shareholder) 10

100

None of Mr. Pennys relatives nor the partnership or corporations are partners in P&P or shareholders in PPP. Under the constructive ownership rules of Section 318, how many shares of Pennypincher Corporation does Mr. Penny own?

		a. 72
		b. 80
		c. 62
		d. 69
		e. Some other amount

4. Candy, who is married to Martin, owns 100 shares of the XYZ Corporation. Under

the constructive ownership rules of Section 318, how many shares of the XYZ

Corporation is Martins mother (Candys mother-in-law) deemed to own?

		a. 100
		b. 40
		c. Zero
		d. None of the above

5. The AC Partnership has two partners Amanda and Cheryl. Each partner has a

50% interest in the partnership. Amanda also owns 80% of the stock (80 shares) of the

ZZZ Corporation. The other 20% (20 shares) of ZZZ are owned by Wendy who is

not related to Amanda or Cheryl. Based on these facts, the AC partnership will be

deemed to own _____________ shares of ZZZ and Cheryl will be deemed to own

___________ shares of ZZZ.

		a. 80 shares, 80 shares.
		b. 20 shares, 20 shares.
		c. 80 shares, 20 shares.
		d. 80 shares, zero shares.
		e. none of the above.