Lucy gives her sister a machine to use in her business with

Reference no: EM13577477

1. Miriam received nontaxable stock rights on June 4, 2010. She allocated $12,000 of the $60,000 basis for the associated stock to the stock rights. The stock rights expire on August 14, 2010. What is Miriam's recognized loss on the expiration of the stock rights?

a. $0.

b. $12,000.

c. $60,000.

d. $72,000

e. None of the above.

2. Harlow owned the following lots of Pansy Corporation stock.

Purchase date	No. of shares	Basis
October 1, 2007	50	$ 4,500
February 8, 2008	50	5,500
September 5, 2008	100	12,000

On October 12, 2010, 100 shares of stock were sold for $14,000. Harlow did not specifically identify the shares of stock sold. What is the recognized gain or loss?

a. $0.

b. $2,000.

c. $3,000.

d. $4,000.

e. None of the above.

3. Lucy gives her sister a machine to use in her business with a fair market value of $10,500 and a basis in Lucy's hands of $9,500. What is the sister's basis for depreciation (cost recovery)?

a. $0.

b. $1,000.

c. $9,500.

d. $10,500.

e. None of the above.

Reference no: EM13577477

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