(1) The "wash sale" rules under Section 1091 of the Code have the effect of:

A Allowing related taxpayers to maximize the tax benefits when assets are sold

B Allowing corporations and shareholders to enter into transactions whereby they can each manipulate their income most favorable to each other

C Allowing related taxpayers to sell assets to each other when they previously could not

D Receiving the tax benefit of selling an asset at a loss until they have permanently disposed of the asset

E Preventing taxpayers from tacking the holding period of a capital asset

(2) If a taxpayer has an asset which is totally or partially destroyed, and is not covered by insurance or the taxpayer is not otherwise adequately compensated, the taxpayer can:

A Use the basis of the destroyed property as the basis for the replacement property

B Only write-off the amount of the loss in the year the loss in incurred

C Collect the insurance proceeds and also take the tax write-off

D Take the tax write-off within 3 years from the date of the loss

E Not take a tax write-off if the property is taken by eminent domain.

Answer rating: 100% (QA)

The detailed answer for the above question is provided below 1 E Preventing taxpayers from t... View the full answer