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In the current year, Fitz, a single taxpayer, sustained a $48,000 loss on Code Sec. 1244 stock in JJJ Corp., a qualifying small business corporation, and a $20,000 loss on Code Sec. 1244 stock in MMM Corp., another qualifying small business corporation. What is the maximum amount of loss that Fitz can deduct for the current year?

(A)$50,000 capital loss

(B)$68,000 capital loss

(C)$18,000 ordinary loss and $50,000 capital loss

(D)$50,000 ordinary loss and $18,000 capital loss

If a corporation issues a 10-year $100,000 8% bond, what is the total that the issuing corporation pays to the bondholder over the next 10 years? Mark one answer:

(A)$80,000 (B)$140,000 (C)$180,000 (D)$100,000 (E)$200,000

Correct Answer: C

A tax return preparer may disclose or use tax return information without the taxpayer’s consent to

(A)Facilitate a supplier’s or lender’s credit evaluation of the taxpayer. (B)Accommodate the request of a financial institution that needs to determine the amount of taxpayer’s debt to it, to be forgiven. (C)Be evaluated by a quality or peer review. (D)Solicit additional nontax business.

Correct Answer: C

In the statement of owner’s equity, owner’s equity or capital is calculated using: Mark one answer:

(A)Gross income (B)The positive or negative cash flow figure from the statement of cash flows (C)Assets (D)Total income from operating activities (E)Net income

Correct Answer: E