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NEW QUESTION: 1
Gibson purchased stock with a fair market value of $14,000 from Gibson's adult child for $12,000.
The child's cost basis in the stock at the date of sale was $16,000. Gibson sold the same stock to an unrelated party for $18,000. What is Gibson's recognized gain from the sale?
A. $0
B. $2,000
C. $4,000
D. $6,000
Answer: B
Explanation:
Explanation
Choice "b" is correct. Losses are disallowed on most related party sales transactions even if they were made at an arm's length (FMV) price. The basis (and related gain or loss) of the (second) buying relative depends on whether the second relative's resale price is higher, lower, or between the first relative's basis and the lower selling price to the second relative. In this case, the $4,000 capital loss on the sale by Gibson's adult child to Gibson [$12,000 SP - $16,000 Basis] is disallowed. Gibson's basis is determined by his selling price to a third party. In this case, the selling price is $18,000, which is HIGHER than the original basis of Gibson's adult child. Gibson's basis in the stock is, therefore, his adult child's basis of $16,000. Gibson's recognized basis is calculated as follows:
Choice "a" is incorrect. There would be a zero gain or loss if the selling price were between the adult child's basis and Gibson's purchase price, but this is not the case in the facts.
Choice "c" is incorrect. This answer option uses the fair market value of the stock at the date of purchase as the basis. As is discussed above, the rules do not provide for this treatment. [$18,000 SP
- $14,000 FMV = $4,000]
Choice "d" is incorrect. This would be the answer if the basis were Gibson's purchase price of
$12,000; however, because the stock sold for more than Gibson's child's basis and the child had a disallowed loss on the sale to Gibson, Gibson is allowed to use his child's original basis of $16,000 as his basis for the stock on the date of the second sale. [$18,000 SP - $12,000 PP = $6,000]
NEW QUESTION: 2
Which information is presented in the building-block view? Rate the alternatives below as either true or false?
K-Question. Assign all answers.
Answer:
Explanation:
Explanation
True ACDE
False B
NEW QUESTION: 3
Which of the following are valid assignments between company code and controlling area?
Note: There are 2 correct answers to this question.
A. One company code to multiple controlling areas (1:n).
B. Multiple company codes to one controlling area (n:1).
C. Multiple company codes to multiple controlling areas (n:n).
D. One company code to one controlling area (1:1).
Answer: B,D
NEW QUESTION: 4
A city is implementing an election results reporting website that will use Amazon GoudFront The website runs on a fleet of Amazon EC2 instances behind an Application Load Balancer (ALB) in an Auto Scaling group.
Election results are updated hourly and are stored as .pdf tiles in an Amazon S3 bucket. A Security Engineer needs to ensure that all external access to the website goes through CloudFront.
Which solution meets these requirements?
A. Create an origin access identity (OAI) in CloudFront. Modify the S3 bucket policy to allow only the new OAI to access the bucket contents. Associate the ALB with a security group that allows only incoming traffic from the CloudFront service to communicate with the ALB.
B. Create an IAM role that allows CloudFront to access the specific S3 bucket. Modify the S3 bucket policy to allow only the new IAM role to access its contents. Create an interface VPC endpoint for CloudFront to securely communicate with the ALB.
C. Create an IAM role that allows CloudFront to access the specific S3 bucket. Modify the S3 bucket policy to allow only the new IAM role to access its contents. Associate the ALB with a security group that allows only incoming traffic from the CloudFront service to communicate with the AL
D. Create an origin access identity (OAI) in CloudFront. Modify the S3 bucket policy to allow only the new OAI to access the bucket contents. Create an interface VPC endpoint for CloudFront to securely communicate with the ALB.
Answer: D