Reference no: EM133090036

Questions -

Q1. Kim owns 100 shares of ABC Inc. with a basis of $50 per share. On December 10 of year 1, she acquires 30 more shares of ABC Inc. for $30 a share. On December 31 of year 1, she sells 90 of her original shares for $40 a share. What is the basis in Kim's remaining 40 shares of ABC Inc.?

-$60 per share in her 10 original shares and $50 per share in her recently acquired 30 shares.

-$50 per share in her 10 original shares and $60 per share in her recently acquired 30 shares.

-$60 per share for her remaining 40 shares.

-$50 per share for her remaining 40 shares.

-None of the above.

Q2. Suppose that during 2020, Donald (15 years of age) received $5,100 in dividends from an IBM bond, and he received another $2,200 in dividend income from an investment that his parents have been contributing to over the years. What is Donald's tax liability assuming that his parents have a marginal tax rate of 22%?

-1122

-970

-860

-1232

-None of the above.