Grading Summary

These are the automatically

computed results of your exam.
Grades for essay questions, and
comments from your instructor, are
in the "Details" section below.
Question Type:

Date Taken:
Time Spent:
Points Received:

11/20/2016
1 h , 00 secs
45 / 60 (75%)

# Of Questions:

# Correct:

Multiple Choice

Essay

N/A

Grade Details - All Questions

Question 1. Question :

(TCO C) Which of the following is an advantage of a C corporation?

Student Answer:

Shareholders not liable for tax based on the corporations

income
Can elect to be taxed as a sole proprietorship.
Subject to double taxation
Unlimited liability

Instructor
Explanation:

Points Received:

Chapter 14, pages 14-3 14-4

5 of 5

Comments:

Question 2. Question :

(TCO C) Which is true of the provisions of IRC 351?

Student Answer:

Taxpayers must make an election to qualify under IRC 351.

It provides for the deferral of gain recognition.

It has a control requirement of 50%.

It is also known as a like-kind exchange.
Instructor
Explanation:

Points Received:

Chapter 14, page 14-6

5 of 5

Comments:

Question 3. Question :

(TCO C) Which is true of the receipt of boot in a transfer under IRC

351?

Student Answer:

Boot may cause a partially taxable event.

Boot is treated no differently from stock received.
Boot can be specifically allocated to one asset.
Boot is something you wear on your feet.

Instructor
Explanation:

Points Received:

Chapter 14, page 14-8

5 of 5

Comments:

Question 4. Question :

(TCO C) Which represents the transfer of a liability?

Student Answer:

A building that has deferred maintenance

A building that has an outstanding mortgage

Cash-basis taxpayers accounts payable
An automobile that is not inspected
Instructor
Explanation:

Points Received:

Chapter 14, page 14-9

5 of 5

Comments:

Question 5. Question :

(TCO F) Who can issue IRC 1244 stock?

Student Answer:

Domestic small business corporations

All C corporations
Any entity with less than 100 owners.
Any corporation that makes the election.

Instructor
Explanation:

Points Received:

Chapter 14, page 14-20

5 of 5

Comments:

Question 6. Question :

(TCO C) Krissy Kraus and Manny Martin form K&M Corp. Krissy
transfers land with an adjusted basis of $10,000 for stock worth
$15,000 and $5,000 cash. Manny transfers a backhoe with an adjusted

basis of $25,000 for stock worth $10,000 and $7,000 cash. What is
Krissys realized gain/loss? Will she recognize any of that gain/loss?
What is Mannys realized gain/loss? Will he recognize any of that loss?

Student Answer:

Instructor
Explanation:

Krissy 15,000+5,000-10,000= 10,000 gain Kristy will not

recognize the gain. Manny 10,000+7,000-25,000=8,000 Manny
will recognize the loss of 8,000.

Krissy has a realized gain of $10,000, but it is only recognized to the

extent of boot. Manny has an $8,000 realized loss of which none is
recognized.
Krissy
10,000

Manny
25,000

FMV stock
FMV cash

15,000
5,000
20,000

10,000
7,000
17,000

Realized gain (loss)

Recognized gain (loss)

10,000
5,000

Adjusted Basis

(8,000)
-

Points Received:

10 of 15

Comments:

Krissy has a realized gain of $10,000, but it is only recognized to

the extent of boot. Manny has an $8,000 realized loss of which
none is recognized. Krissy Manny Adjusted Basis 10,000 25,000
FMV stock 15,000 10,000 FMV cash 5,000 7,000 20,000 17,000
Realized gain (loss) 10,000 (8,000) Recognized gain (loss) 5,000
-

Question 7. Question :

(TCO F) Billy Barker, a single taxpayer, has basis in IRC 1244 stock of
$150,000. Billy sells the stock for $60,000. What is his gain or loss?
How much is ordinary? How much is capital?

Student Answer:
Instructor
Explanation:

150,000-60,000=90,000 loss. Ordinary=90,000x0.25=22,500

Capital

Billy has a loss of $90,000 of which $50,000 is ordinary (single limits)

and $40,000 is capital.
Adjusted Basis
Sale Price
Realized gain (loss)
Ordinary Loss

150,000
60,000
(90,000)
(50,000)

Capital Loss

(40,000)

Points Received:

10 of 20

Comments:

illy has a loss of $90,000 of which $50,000 is ordinary (single

limits) and $40,000 is capital. Adjusted Basis 150,000 Sale Price
60,000 Realized gain (loss) (90,000) Ordinary Loss (50,000)
Capital Loss (40,000)

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