Questions -
1) On January 12 of the current year, Barney Corporation, a publicly-held corporation, files for bankruptcy. During the bankruptcy proceedings it is determined that creditors will only receive 10% of what they are owed and that the shareholders will receive nothing. Sheryl, a calendar-year taxpayer, purchased 1,000 shares of Barney Corporation common stock for $7,000 on February 22 of the prior year. What tax issues should Sheryl consider?
2) In a rage because of personal difficulties, Evan drove recklessly and crashed his automobile, doing $8,000 worth of damage. Fortunately, no one was injured. Since Evan received two speeding tickets during the past year, he is concerned about losing his insurance if he files an insurance claim. What tax issues should Evan consider?