CHAPTER 14–PROPERTY TRANSACTIONS

| November 9, 2018

130.What effect does a
deductible casualty loss have on the adjusted basis of property?

131.Can dividend treatment
result to a shareholder on a distribution from a corporation that has no E
& P?

132.If a taxpayer purchases taxable bonds at a premium, the
amortization of the premium is elective. However, if a taxpayer purchases
tax-exempt bonds at a premium, the amortization of the premium is mandatory.
Explain this difference in the treatment.

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133.Under what circumstances will
a distribution by a corporation to its only shareholder result in a capital
gain?

134.Describe the relationship between the recovery of capital
doctrine and the realized and recognized gain and loss concepts.

135.If a taxpayer purchases a
business and the price exceeds the fair market value of the listed assets, how
is the excess allocated among the purchased assets?

136.Lois received nontaxable stock rights with a
fair market value of $4,000. The fair market value of the stock on which the
rights were received is $24,000 (cost $14,000). Assume the rights are exercised
by paying $31,000 plus the rights. Discuss how to calculate the basis of the
old stock and the basis of the new stock.

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137.For gifts made after 1976,
when will part of the gift tax paid by the donor be added to the donee’s basis?

138.Joseph converts a building (adjusted basis of $50,000 and
fair market value of $40,000) from personal use to business use. Justin
receives a building with a $40,000 fair market value ($50,000 donor’s adjusted
basis) from his mother as a gift. Discuss the tax consequences with respect to
Joseph’s and Justin’s adjusted basis.

139.Discuss the
application of holding period rules to property acquired by gift and
inheritance.

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