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On October 15 of last year, Erin purchased stock in Happy Irish Ale Corporation for $2,000. The stock is not small business stock. On June 15 of the current year, the stock became worthless. How should Erin treat the loss this year on her tax return?

Arrange the following statutes of limitation from longest to shortest.  1. Fraud. 2. Collection of deficiency by IRS. 3. Substantial Understatement of Income greater than 25%. 4. General Statute of Limitations under Section 6501.

Travis owns rental property and is an active participant in the management & upkeep of the property.  Unfortunately the property suffered a loss of $24,000.   If Randy’s AGI is $160,000 for the current  year, what is his  available loss against ordinary income assuming he has the required amount at risk?

Grace obtained a first mortgage loan this year from her mother, Angela, in the amount of $200,000 to acquire a home in Austin, Texas. Grace owns no other real property. She has no investment income. The loan’s interest rate is 1%, with a 30 year amortization schedule of monthly payments. The Applicable Federal Rate for interest on this type of loan is 5%. Which of the following statements is (are) true? I. Grace will be able to claim an interest expense deduction for interest on a qualified residence, if she itemizes deductions II. Angela is required to report interest income based on an IRS schedule of rates, rather than the 1% rate charged to Grace.

Income to U.S. taxpayers is taxed in the year it is derived in which of the following situations? 

All of the following will be treated the same for both regular income tax & AMT except: 

Steve started an S Corp with $55,000 and is the only employee.  A few months later, he loaned the company another $30,000. At the end of the year, the S Corp had a taxable loss of $95,000.  How much can he deduct on his personal tax return?

Joey actively participates in the managing of his rental property.His AGI is $125,000 for the current year and the rental real estate business had a loss of$20,000. What is Joey’s available loss against ordinary income assuming he has therequired amount at risk?

Jimmy bought 150 shares of Cap Rock Stock for $25 per share five years ago. His son,  James thinks a new product Cap Rock invented will make the stock increase in value. Jimmy thinks the stock is worthless, but agrees to sell his shares to James for $20.   What is Jimmy’s allowed loss? 

The substitute basis of a qualifying asset received in a like-kind exchange is the asset’s adjusted cost basis from the original property