Misc. Multiple Choice Questions

Barbara sold 100 shares of STP Company stock to her daughter, Doris, for $7,000. Th e stock originally costBarbara $10,000. Doris later sells the stock on the open market for $8,000. Doris recognizes:a. no gain or loss.b. a $1,000 gain.c. a $2,000 gain.d. a $3,000 loss.e. a $2,000 loss.An apartment building owned by Frank was condemned by the state on March 1, 2012. Frank receivedthe condemnation award on February 1, 2013. What is the last date that Frank can acquire appropriatereplacement property if he wants to qualify for nonrecognition treatment?a. March 1, 2015b. March 1, 2016c. December 31, 2015d. December 31, 2016e. February 1, 2016Which of the following persons is not a “family member” for purposes of the related party rules?a. Grandparentb. Sisterc. Sond. Mothere. All of the above are family membersWhich of the following is not taken into consideration in computing the seller’s amount realized from theexchange of property?a. Debt that the buyer assumesb. Commissions paid by the sellerc. Legal fees paid by the seller in conjunction with the saled. All of the above are taken into consideration in computing amount realizede. None of the above are taken into consideration in computing amount realizedSeveral years ago, Jan paid $25,000 for 1,000 shares of stock in ABC. During the current year ABC declares atwo-for-one stock split. Shortly thereafter, Jan sells 500 shares of ABC stock for $18,000. Her recognized gainon the sale of the 500 shares is:a. $0.b. $11,750.c. $5,500.d. $9,000.e. $7,500.Joel’s main home is destroyed in a tornado in a federally declared a disaster area. Th e insurance companycompensates Joel for his loss in 2013, which produces a $350,000 realized gain. How long does Joel have topurchase a new principal residence and avoid being taxed on the gain?a. December 31, 2013b. December 31, 2014c. December 31, 2015d. December 31, 2016e. December 31, 2017