Monte Inherited 1,000 Shares of Corporation Zero Stock from His

question 43

Multiple Choice

Monte inherited 1,000 shares of Corporation Zero stock from his father who died on March 4 of the current year.His father paid $30 per share for the stock on September 2,2005.The FMV of the stock on the date of death was $50 per share.On September 4 this year,the FMV of the stock was $55 per share.The executor did not elect the alternate valuation date.Monte sold the stock for $65 per share on December 3.What is the amount and nature of any gain or loss?

• A)$10,000 LTCG
• B)$35,000 LTCG
• C)$15,000 LTCG
• D)$15,000 STCG

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Definitions:

Accrual-Basis Accounting

An accounting method where revenue and expenses are recorded when they are earned or incurred, regardless of when the cash is received or paid.

Deferred Revenue

Income received by a company for goods or services yet to be delivered or performed, recognized as a liability until the obligation is fulfilled.

Unearned Rent

is income received by a landlord for rent that has been paid in advance by a tenant but has not yet been earned.

Adjust Revenue

The act of modifying the reported amount of revenue to more accurately reflect the earnings of a period, following certain accounting principles and standards.