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NEW QUESTION: 1
Wallace purchased 500 shares of Kingpin, Inc. 15 years ago for $25,000. Wallace has worked as an
owner/employee and owned 40% of the company throughout this time. This year, Kingpin, which is not an
S corporation, redeemed 100% of Wallace's stock for $200,000. What is the treatment and amount of
income or gain that Wallace should report?
A. $200,000 long-term capital gain.
B. $175,000 long-term capital gain.
C. $0
D. $175,000 ordinary income.
Answer: B
Explanation:
Explanation
Choice "b" is correct. An investment in a capital asset (e.g., stock) results in the income being capital
(either a capital loss or a capital gain). Ownership percentage is not a factor in the calculation, and, in this
question, nor is the fact that the corporation is not an S corporation. The calculation is simple:
Wallace invested $25,000 in the stock and received $200,000 for 100% of his investment 15 years later.
The capital gain is $175,000 ($200,000 - $25,000), and it is considered long-term because the stock was
held for greater than one year.
Choice "a" is incorrect. There is $175,000 of gain on the transaction ($200,000 - $25,000). This type of
transaction is not a transaction that is excluded from tax in the tax code.
Choice "c" is incorrect. An investment in a capital asset (e.g., stock) results in the income being capital
(either a capital loss or a capital gain). Although the calculation of the income is correct (i.e., $175,000),
ordinary income is not the proper treatment for this transaction.
Choice "d" is incorrect. Although this transaction does result in a long-term capital gain, Wallace has basis
in the stock ($25,000), and the gain is calculated as the proceeds from the sale ($200,000) less the basis
in the stock.

NEW QUESTION: 2
What does the frame-relay interface-dlci command configure?
A. remote DCLI on the subinterface
B. remote DLCI on the main interface
C. local DLCI on the subinterface
D. local DLCI on the main interface
Answer: C
Explanation:
Explanation/Reference:
Frame Relay for ICND Exam
Reference:
http://www.ciscopress.com/articles/article.asp?p=100603&seqNum=3
Explanation:
To assign a data-link connection identifier (DLCI) to a specified Frame Relay subinterface on the router or access server, or to assign a specific permanent virtual circuit (PVC) to a DLCI, or to apply a virtual template configuration for a PPP session, use the frame-relay interface-dlci interface configuration command
Example 4-23 Example of frame-relay interface-dlci Command and the Output of show frame-relay map
R4(config)#interface s1/2.403 point-to-point
R4(config-subif)#frame-relay interface-dlci ?
<16-1007> Define a switched or locally terminated DLCI
R4(config-subif)#frame-relay interface-dlci 403 ?
cisco Use CISCO Encapsulation
ietf Use RFC1490/RFC2427 Encapsulation
ppp Use RFC1973 Encapsulation to support PPP over FR
protocol Optional protocol information for remote end
<cr>
R4#show frame-relay map
Serial1/2.403 (up): point-to-point dlci, dlci 403(0xC9,0x3090), broadcast status defined, active
R4#

NEW QUESTION: 3
Universal containers has a fixed bundle with selected Product Options, After selecting the bundle, the user should bypass the configuration process.
How should the Admin set up the bundle to meet this requirement?
A. Set the bundle product record fields Configuration Type to Allowed and Configuration Event to Add
B. Set the bundle product record filed Configuration Type to Required and Configuration Event to Always.
C. Set the bundle product record filed Configuration type to Allowed and Configuration Event to Always.
D. Set the bundle product record fields Configuration Type to Disabled and Configuration Event to Always.
Answer: C