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NEW QUESTION: 1
Wallace purchased 500 shares of Kingpin, Inc. 15 years ago for $25,000. Wallace has worked as an
owner/employee and owned 40% of the company throughout this time. This year, Kingpin, which is not an
S corporation, redeemed 100% of Wallace's stock for $200,000. What is the treatment and amount of
income or gain that Wallace should report?
A. $0
B. $175,000 long-term capital gain.
C. $200,000 long-term capital gain.
D. $175,000 ordinary income.
Answer: B
Explanation:
Explanation
Choice "b" is correct. An investment in a capital asset (e.g., stock) results in the income being capital
(either a capital loss or a capital gain). Ownership percentage is not a factor in the calculation, and, in this
question, nor is the fact that the corporation is not an S corporation. The calculation is simple:
Wallace invested $25,000 in the stock and received $200,000 for 100% of his investment 15 years later.
The capital gain is $175,000 ($200,000 - $25,000), and it is considered long-term because the stock was
held for greater than one year.
Choice "a" is incorrect. There is $175,000 of gain on the transaction ($200,000 - $25,000). This type of
transaction is not a transaction that is excluded from tax in the tax code.
Choice "c" is incorrect. An investment in a capital asset (e.g., stock) results in the income being capital
(either a capital loss or a capital gain). Although the calculation of the income is correct (i.e., $175,000),
ordinary income is not the proper treatment for this transaction.
Choice "d" is incorrect. Although this transaction does result in a long-term capital gain, Wallace has basis
in the stock ($25,000), and the gain is calculated as the proceeds from the sale ($200,000) less the basis
in the stock.

NEW QUESTION: 2

A. Option A
B. Option B
C. Option D
D. Option E
E. Option C
Answer: A,B

NEW QUESTION: 3
Refer to the exhibit.

How many simultaneous outbound calls are possible with this Cisco Unified Communications Manager Express configuration on these two phones?
A. 0
B. 1
C. 2
D. 3
E. 4
Answer: C
Explanation:
Ephone is configured as octo line so maximum call number is 8 and it will be divided between lines.

NEW QUESTION: 4
HSRPデフォルト設定でアクティブルータを決定するためにどの値が使用されますか。
A. ルータ追跡番号
B. ルーターのIPアドレス
C. ルーターのループバックアドレス
D. ルーターの優先順位
Answer: C