Bob, an employee of Modern Corp., receives a fringe benefit (in lieu of a salary increase) of $100. Bob is in a 33% tax bracket. The fringe benefit is nontaxable to Bob and is not deductible as an itemized deduction. Bob's after-tax savings from receiving the tax-free benefit is

Bob, an employee of Modern Corp., receives a fringe benefit (in lieu of a salary increase) of $100. Bob is in a 33% tax bracket. The fringe benefit is nontaxable to Bob and is not deductible as an itemized deduction. Bob's after-tax savings from receiving the tax-free benefit is

A) $0.
B) $33.
C) $67.
D) $100.



Answer: B

In September of 2011, Michelle sold shares of qualified small business stock for $1,000,000 that had a basis of $200,000. She had held the stock for 7 months. Forty-five days after the sale she purchased other qualified small business stock for $1,100,000. What is the basis in the new stock she purchased?

In September of 2011, Michelle sold shares of qualified small business stock for $1,000,000 that had a basis of $200,000. She had held the stock for 7 months. Forty-five days after the sale she purchased other qualified small business stock for $1,100,000. What is the basis in the new stock she purchased?

A) $200,000
B) $300,000
C) $800,000
D) $1,100,000



Answer: B

In September of 2011, Michelle sold shares of qualified small business stock for $1,000,000 that had a basis of $200,000. She had held the stock for 7 months. Forty-five days after the sale she purchased other qualified small business stock for $1,100,000. How much of the gain will she recognize?

In September of 2011, Michelle sold shares of qualified small business stock for $1,000,000 that had a basis of $200,000. She had held the stock for 7 months. Forty-five days after the sale she purchased other qualified small business stock for $1,100,000. How much of the gain will she recognize?

A) $ -0-
B) $100,000
C) $800,000
D) $900,000



Answer: A

This year, Jason sold some qualified small business stock that he acquired in 2004. His basis in the stock was $95,000 and he sold it for a $30,000 gain. How much of Jason's gain is taxable?

This year, Jason sold some qualified small business stock that he acquired in 2004. His basis in the stock was $95,000 and he sold it for a $30,000 gain. How much of Jason's gain is taxable?

A) $-0-
B) $15,000
C) $30,000
D) $47,500


Answer: B

The discharge of certain student loans is excluded from income if all of the following are present except for

The discharge of certain student loans is excluded from income if all of the following are present except for

A) the loan must have been made by governmental, educational, or charitable organizations.
B) the loan proceeds must have been used to pay the cost of attending an education institution or used to refinance outstanding student loans.
C) the loan forgiveness must be contingent upon the individual's working for a specified period of time in certain professions.
D) the loan forgiveness is based on age.



Answer: D

Connor owes $4 million and has assets of only $1 million. He declares and files personal and business bankruptcy and his creditors approve a payment plan of $.25 per dollar. Connor has a net operating loss carryover of $2 million. The remaining 75 percent of his debt will be canceled. Connor must recognize income of

Connor owes $4 million and has assets of only $1 million. He declares and files personal and business bankruptcy and his creditors approve a payment plan of $.25 per dollar. Connor has a net operating loss carryover of $2 million. The remaining 75 percent of his debt will be canceled. Connor must recognize income of

A) $0.
B) $1 million.
C) $2 million.
D) $3 million.


Answer: A