Individual Taxation - Basis Flashcards

1
Q

How do you determine a taxpayer’s basis for dividend stock (generally)?

A

Generally a taxpayer’s basis for original stock is allocated to the dividend stock in proportion to fair market values. Note that this is NOT the case for dividends on preferred stock

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2
Q

How do you determine a taxpayer’s basis for dividends on preferred stock?

A

The basis for the dividend shares will be equal to the FMV on the date of distribution

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3
Q

T/F

A special assessment for installation of a sewer system is deductible in calculating itemized deductions from AGI

A

FALSE

This would be added to the basis of the residence

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4
Q

The amount of a personal casualty loss is computed as ___

A

The lesser of the Adjusted Basis of the Property OR the Decline in the Property’s FMV as a result from the casualty.

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