Q1) Michael received land as a gift from his father in 2008. At the time of the gift, the land had a FMV of $185,000 and an adjusted basis of $210,000 to Michael's father. There was no gift tax due with respect to this transfer. A year and a day later, Michael sold the land for $180,000. What was his realized gain or loss on this transaction?

Q2) Maria and Tia form a corporation in a transaction governed by Code Section 351. Tia transfers real estate to the corporation. The real estate has an adjusted basis to Tia of $150,000 and a FMV of $200,000 on the date of the transfer. Tia also transfers cash of $40,000. In exchange for the transfer of the real estate and cash, Tia receives one-half of the stock of the corporation. The property is subject to an $180,000 mortgage, which the corporation assumes. The corporation's adjusted basis in the real estate immediately after the contribution is

a. $200,000.

b. $180,000.

c. $150,000.

d. $130,000.

e. $190,000.

Q3) During 2009, Henry reported the following income and loss:

Activity X............................................$50,000 loss

Activity Y............................................$20,000 income

Both Activity X and Activity Y are passive activities as to Henry. Henry purchased Activity X in 1988 and Activity Y in 1994. How much, if any, passive activity loss will be carried over to 2010?

a. $50,000.

b. $30,000.

c. $20,000.

d. 0.

e. none of the above.