REGULATION {REG} REAL EXAM QUESTIONS AND
CORRECT ANSWERS 2025 LATEST//ALREADY
GRADED A+
In which of the following situations will a controlled foreign corporation located in
Ireland be deemed to have subpart F income? - (answer)1. Property is produced
in Ireland by the iIrish company and sold outside its country of incorporation.
2. Services are performed in Ireland by the Irish company under a contract
entered into by its US parent.
3. Services are provided by an Irish company in England under a contract entered
into by its US parent
4. Property is bought from the controlled foreign corporations US parent and is
sold by an Irish company for use in an Irish manufacturing plant.
Answer: 3 is correct because generally includes income that has no economic
connection to the county of origin.
Troy and Edie are married and under 65. During the current year, they furnish
more than half of the support for their 20 year old daughter, Jobeth, who lives
with them. Jobeth earns $15,000 from a part-time job, most of which she sets
aside for future college expenses. Troy and Edie also provide more than half of
the support for Troy's cousin who does not live with them. Edie's father, who died
on Jan 3, of the current year, at age 80, has for many years qualified as their
dependent. How many exemptions should they claim? - (answer)Three
exemptions. Troy, Edie, and the father.
In a common law action against an accountant, lack of privity is a viable defense if
the plaintiff:
,1. Is the accountants client
2. Can prove the presence of gross negligence that amounts to the reckless
disregard for the truth.
3. Bases the action upon fraud.
4. Is the client's creditor who sues the accountant for negligence. - (answer)4. Is
the client's creditor who sues the accountant for negligence.
A plaintiff wishes to recover damages from the issuers of securities for losses
resulting from material misstatements in a securities registration statement. In
order to be successful, one of the elements the plaintiff must prove is that the:
1. Plaintiff was in privity of contract with the issuer or that the issuer knew of the
plaintiff.
2. Issuer acted fraudulently.
3. Plaintiff acquired the securities
4.Issuer acted negligently. - (answer)3. Plaintiff acquired the securities.
Under Section 11 of the 33 Act, the plaintiff must prove that there was a material
misstatement and they suffered damages by acquiring the securities.
Which of the following defenses will release a gratuitous surety from liability to a
creditor?
, 1. Filing of an involuntary petition in bankruptcy against the principal debtor.
2. Fraud by the debtor which induced the surety to enter into the contract and
the creditor was unaware of the fraud.
3. Release of the principal debtor's obligation by the creditor but with the
reservation of the creditor's rights against the surety.
4. The creditor and debtor enter into a binding agreement to extend the debtors
time for payment without the surety's consent. - (answer)4. The creditor and
debtor enter into a binding agreement to extend the debtors time for payment
without the surety's consent.
A gratuitous surety will be released when the creditor commits fraud, when there
is duress or breach, when the surety lacks capacity or goes bankrupt, or when
there is a material change without the surety's consent.
Under the Sales Article of the UCC, in an auction announced in explicit terms to be
without reserve, when may an auctioneer withdraw the goods put up for sale?
1. At any time until the auctioneer announces completion of the sale.
2. If no bid is made within a reasonable time. - (answer)2. If no bid is made within
a reasonable time.
Farr made a gift of stock to her child, Pat. At the date of gift, Farr's stock basis was
$10,000 and the stock FMV was $15,000. No gift taxes were paid. What is Pat's
basis in the stock for computing gain? - (answer)$10,000
CORRECT ANSWERS 2025 LATEST//ALREADY
GRADED A+
In which of the following situations will a controlled foreign corporation located in
Ireland be deemed to have subpart F income? - (answer)1. Property is produced
in Ireland by the iIrish company and sold outside its country of incorporation.
2. Services are performed in Ireland by the Irish company under a contract
entered into by its US parent.
3. Services are provided by an Irish company in England under a contract entered
into by its US parent
4. Property is bought from the controlled foreign corporations US parent and is
sold by an Irish company for use in an Irish manufacturing plant.
Answer: 3 is correct because generally includes income that has no economic
connection to the county of origin.
Troy and Edie are married and under 65. During the current year, they furnish
more than half of the support for their 20 year old daughter, Jobeth, who lives
with them. Jobeth earns $15,000 from a part-time job, most of which she sets
aside for future college expenses. Troy and Edie also provide more than half of
the support for Troy's cousin who does not live with them. Edie's father, who died
on Jan 3, of the current year, at age 80, has for many years qualified as their
dependent. How many exemptions should they claim? - (answer)Three
exemptions. Troy, Edie, and the father.
In a common law action against an accountant, lack of privity is a viable defense if
the plaintiff:
,1. Is the accountants client
2. Can prove the presence of gross negligence that amounts to the reckless
disregard for the truth.
3. Bases the action upon fraud.
4. Is the client's creditor who sues the accountant for negligence. - (answer)4. Is
the client's creditor who sues the accountant for negligence.
A plaintiff wishes to recover damages from the issuers of securities for losses
resulting from material misstatements in a securities registration statement. In
order to be successful, one of the elements the plaintiff must prove is that the:
1. Plaintiff was in privity of contract with the issuer or that the issuer knew of the
plaintiff.
2. Issuer acted fraudulently.
3. Plaintiff acquired the securities
4.Issuer acted negligently. - (answer)3. Plaintiff acquired the securities.
Under Section 11 of the 33 Act, the plaintiff must prove that there was a material
misstatement and they suffered damages by acquiring the securities.
Which of the following defenses will release a gratuitous surety from liability to a
creditor?
, 1. Filing of an involuntary petition in bankruptcy against the principal debtor.
2. Fraud by the debtor which induced the surety to enter into the contract and
the creditor was unaware of the fraud.
3. Release of the principal debtor's obligation by the creditor but with the
reservation of the creditor's rights against the surety.
4. The creditor and debtor enter into a binding agreement to extend the debtors
time for payment without the surety's consent. - (answer)4. The creditor and
debtor enter into a binding agreement to extend the debtors time for payment
without the surety's consent.
A gratuitous surety will be released when the creditor commits fraud, when there
is duress or breach, when the surety lacks capacity or goes bankrupt, or when
there is a material change without the surety's consent.
Under the Sales Article of the UCC, in an auction announced in explicit terms to be
without reserve, when may an auctioneer withdraw the goods put up for sale?
1. At any time until the auctioneer announces completion of the sale.
2. If no bid is made within a reasonable time. - (answer)2. If no bid is made within
a reasonable time.
Farr made a gift of stock to her child, Pat. At the date of gift, Farr's stock basis was
$10,000 and the stock FMV was $15,000. No gift taxes were paid. What is Pat's
basis in the stock for computing gain? - (answer)$10,000
