Awma Exam Practice Test (Questions And Answers) Updated

Bill is a participant in his company's stock bonus plan that was established two years ago when the company contributed 1,000 shares of its stock to Bill's plan account. At the time, these shares were each valued at $15. During the current year, Bill took a lump-sum distribution from the plan and sold his shares for $25 each. Bill will have to report ordinary income for the current year equal to which one of the following amounts? {Ans: $15,000 Bill is immediately taxed on the cost, or basis, of the securities received, and at ordinary income rates. Hence, he would have to include $15,000 (1,000 shares × $15) as ordinary income for the current year. Bill's net unrealized appreciation (NUA) in the distribution is taxed during the current year. His NUA equals $10 per share ($25 per share less $15 per share), so he also will have to report a long-term capital gain of $10,000 ($10 NUA per share × 1,000 shares).}The gross income multiplier (GIM) that can be used to value real estate is closest to what financial ratio? {Ans: *price-to-sales The gross income multiplier approach is similar to the price-to-sales ratio since it involves coming up