1. Which of the following is not related party for constructive ownership purpos
ID: 341835 • Letter: 1
Question
1. Which of the following is not related party for constructive ownership purposed under section 267?
a. A trust that taxpayer is a trustee of.
b. A partnership where the taxpayer has more than a 50% interest.
c. The taxpayer’s half-sister.
d. The taxpayer’s brother in law
e. None of the above.
2. In May 2017, Hershel’s personal residence was completely destroyed by fire. He was insured for 100% of his actual loss. Hershel received the insurance settlement of 250,000 for the casualty in November 2017. In 2017, Hershel had adjusted gross income (AGI) of 50,000 before considering the casualty. Hershel’s basis in his residence was 280,000. The value of his residence before the casualty was 250,00 and after the casualty $0. What is Hershel’s allowable casualty gain or loss deduction?
a. 280,000 loss
b. 250,000 gain
c. 0
d. 5,000 gain
e. 30,000 loss
Explanation / Answer
1. d. The taxpayer’s brother in law.
As only brothers and sisters are included in family including those by half blood
2. c. 0 .
As the value of property was 250,000 before casulty and claim was received for full amount,
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