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##### On January 1, 2012, Jasmine made a \$50,000 interes...

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On January 1, 2012, Jasmine made a \$50,000 interest-free loan to her son, Jason, who used the money to retire a mortgage on his personal residence. Jason's only sources of income were a salary of \$75,000 and \$1,500 interest income on a savings account. The relevant federal interest rate was 6%. Based on the above information, for 2012: (Points : 5) Jason is not required to recognize the interest income from the bank account. Jasmine must recognize \$3,000 interest income from the loan. Jasmine must recognize \$1,500 interest income from the loan. Jasmine must recognize \$3,045 interest income from the loan. Jasmine recognizes no imputed interest income from the loan. In January, Charlie sold stock with a cost basis of \$40,000 to his brother Allen for \$30,000, the fair market value of the stock on the date of sale. Five months later, Allen sold the same stock through his broker for \$45,000. What is the tax effect of these transactions? (Points : 5) Disallowed loss to Allen of \$10,000; recognized gain to Charlie of \$5,000 Disallowed loss to Charlie of \$10,000; recognized gain to Allen of \$15,000 Deductible loss to Charlie of \$10,000; recognized gain to Allen of \$15,000 Disallowed loss to Charlie of \$10,000; recognized gain to Allen of \$5,000 None of the above During the year, Clara took a trip from Chicago to Rome. She was away from home for 20 days. She spent 6 days vacationing and 14 days on business (including the 3 travel days). Her expenses are as follows: Airfare \$1,600 Lodging (20 days x \$70) \$1,400 Meals (20 days x \$120) \$2,400 Valet service (cleaning of laundry) \$160 Chris's deduction is: (Points : 5) \$3,100. \$4,360. \$5,080. \$5,560. None of the above

Paper#4293 | Written in 18-Jul-2015

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