Reference no: EM132463532

Requirement

Question a. What is the amount of gain that may be excluded from Paul's gross income, (Enter a -0- if none of the gain may be excluded from the taxpayer's gross income )
The amount of gain that may be excluded from Paul's gross income is $ 15 700.000

Requirement

Question b. What would your answer be if the fair market value of the Alpha stock were only $810.000 upon its issue? (Enter a "O" if none of the gain may be excluded from the taxpayers gross income )
Under this condition. the amount of gain that may be excluded from Paul's gross income is $ 10.000.000

Requirement

Question c. What would your answer be if the stock were sold after two years? (Enter a "0" if none of the gain may be excluded fromthe taxpayer's gross income.) If the stock were sold after two years. the amount of gain that may be excluded from Paufs gross income is $ 0

Requirement

Question d. Can Paul avoid recognizing gain by purchasing replacement stock?

A. Yes. If Paul acquires 54,400 000 or more of qualified stock within six months no gain is recognized providing the original stock was held for over five years.

B. No. Paul must recognize gain on the sale of the Alpha Corporation common stock because the sale exceeded 510.000.000.

C. Yes If Paul acquires 510.000.000 or more of qualified stock within 60 days no gain is recognized, providing the original stock was held for over five years

D. Yes If Paul acquires 516 800,000 or more of qualified stock within 60 days no gain is recognized, providing the original stock was held for over six months