Which of the following is true of trading investments?
A) They are held for more than two years.
B) They are generally recorded as long-term investments.
C) They must be adjusted and reported at fair value at the end of each accounting period.
D) They are always reported on the balance sheet at their historical cost.
C
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In Year 1, Farb, a cash-basis individual taxpayer, received an $8,000 invoice for personal property taxes. Believing the amount to be overstated by $5,000, Farb paid the invoiced amount under protest and immediately started legal action to recover the overstatement. In November Year 2, the matter was resolved in Farb's favor, and he received a $5,000 refund. Farb itemizes deductions on his tax returns. Which of the following statements is true regarding the deductibility of the property taxes?
a. Farb should deduct $8,000 in his Year 1 income tax return and report the $5,000 refund as income in his Year 2 income tax return. b. Farb should deduct $3,000 in his Year 2 income tax return. c. Farb should deduct $3,000 in his Year 1 income tax return. d. Farb should not deduct any amount in his Year 1 income tax return when originally filed, and he should file an amended Year 1 income tax return in Year 2.
Choose the correct word or words in parentheses. When she heard the crash, Marcy came rushing (in, into) the room