True or False 1. Judy is a cash basis attorney. This year, she performed services in connection with the formation of a corporation and received stock with a value of $4,000 for her services. By the end of the vear, the value of the stock had decreased to $2,000. She continued to hold the stock. Judy must recognize $4,000 of gross income from the stock for the current year. 2. The fact that the accounting method the taxpayer uses to measure income is consistent with GAAP does not ensure that the method will be acceptable for tax purposes. 3. A sole proprietor purchased an asset for $1,000 in 2019. Its value was $1,500 at the end of 2019. In 2020, the taxpayer sold the asset for $1,400. In 2020, the proprietor realized a taxable gain of $400 4. The constructive receipt doctrine requires that income be recognized when it is made available to the cash basis taxpayer, although it has not been actually received. The constructive receipt doctrine does not apply to accrual basis taxpayers. S. On 1/2/2019 the taxpayer invested $100,000 in a certificate of deposit (CD) at the bank. The bank credited (posted) $3,000 of interest to the taxpayer's account on 12/31/2019. The taxpayer withdrew the $3,000 from his account on 1/17/2020, and then closed his account. The taxpayer must report the interest income in the tax year 2020