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Dennis sold stock in Acme Widgets, a NYSE listed company, to Kurt for $30,000.  His basis in the stock was $50,000, so he incurred a $20,000 capital loss. Kurt is Dennis' brother-in-law (i.e., Kurt is the husband of Dennis' sister).  Is the loss subject to the related party loss disallowance rules?


2. Monica is a rancher. This year, her herd of cattle, having an adjusted basis of $90,000, was infested with a mad cow disease and had to be destroyed. Monica's insurance policy reimburses her $120,000. Monica uses the insurance proceeds to buy a new herd of cattle. What are the tax consequences of these transactions?

 
3. Melanie owed Bruce $10,000. In payment of this debt, Melanie transferred to Bruce a life insurance policy on Melanie, with a cash surrender value of $10,000. The face value of the policy is $250,000. Bruce names himself as the beneficiary of the policy and continues to make the premium payments. After Bruce has paid $15,000 in premiums, Melanie dies and Bruce collects $250,000. Is any of the $250,000 Bruce received includable in his taxable income?

 
4. Kiren is 55 years old and has an IRA with $160,000 in it. Her son, Randy, was accepted to Stanford Medical School. Kiren had not planned for this and needs to withdraw $40,000 per year out of her Individual Retirement Account ("IRA") to help pay the tuition and fees at Stanford. What are the tax consequences to Kiren of the withdrawals from the IRA?


5. Glen Zucker is opening a new trendy restaurant in the Calabasas shopping center. He owns a self-directed Individual Retirement Account ("IRA") and would like to liquidate stocks from his IRA and use up to $300,000 from his IRA account to have the IRA invest in the new restaurant business. What are the tax implications if an IRA invests in a partnership that owns and operates a restaurant?

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