Instructions : Please provide 2-3 sentence brief explanation and choose if the s
ID: 2564274 • Letter: I
Question
Instructions : Please provide 2-3 sentence brief explanation and choose if the statement is true or false. All sources must be noted. SHOW ALL WORK.
____ F. A bona fide debt cannot arise on a loan between father and son.
____ G. A loss is not allowed for a security that declines in value.
____ H. Several years ago, Jim purchased 2,000 shares of Black Corporation § 1244 stock from Black Corporation for $40,000. Last year, Jim sold one-half of his Black Corporation stock to Sam for $12,000. During the current year, Jim sold the remaining Black Corporation stock for $4,000. Jim has a $16,000 ($4,000 – $20,000) ordinary loss for the current year.
____ I. The concept of depreciation assumes that the asset has a determinable useful life.
____ J. Jake performs services for Maude. If Jake provides his own helper and tools, this is indicative of independent contractor (rather than employee) status.
Explanation / Answer
Statements True / False F. A bona fide debt cannot arise on a loan between father and son. FALSE G. A loss is not allowed for a security that declines in value. TRUE H. Several years ago, Jim purchased 2,000 shares of Black Corporation § 1244 stock from Black Corporation for $40,000. Last year, Jim sold one-half of his Black Corporation stock to Sam for $12,000. During the current year, Jim sold the remaining Black Corporation stock for $4,000. Jim has a $16,000 ($4,000 – $20,000) ordinary loss for the current year. FALSE I. The concept of depreciation assumes that the asset has a determinable useful life. TRUE J. Jake performs services for Maude. If Jake provides his own helper and tools, this is indicative of independent contractor (rather than employee) status. TRUE