Dan sells his expensive sports car to his brother for $100. The next week, Dan files forbankruptcy under Chapter 7. Regarding the sale of the car, the trustee may1) not cancel it, but can sue Dan's brother for return of the $100.2) cancel it as a voidable preference.3) not cancel it because it is a sale, not a gift.4) cancel it as a fraudulent transfer.

In the context of a bankruptcy case under Chapter 7, the trustee has the authority to review and…

Answered: Dan sells his expensive sports car to…

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter19: Family Tax Planning

Section: Chapter Questions

Problem 8DQ

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Quince owns a used-car lot where Ray works as a salesperson. Quince tells Ray not to make any warranties for the cars. To make a sale to Sylvia, however, Ray adds a 50,000-mile warranty. Later, Sylvia sues Quince for breach of warranty. Quince may hold Ray liable for any damages he must pay to Sylvia under which remedy: a. indemnification b. avoidance c. constructive trust d. accounting
Joanna takes a security interest in the equipment in Jason Store and files a financing statement claiming “equipment and all after acquired equipment.” Berkeley later sells Jason Store a cash register, taking a security interest in the register, and (a) files nine days after Jason receives the register or (b) files twenty-five days after Jason receives the register. If Jason fails to pay both Joanna and Berkeley and they foreclose their security interests, who has priority on the cash register? Explain.
Jessica sold goods to Stacy for $2,500 and retained a security interest in them. Two months later, Stacy filed a voluntary petition in bankruptcy. At this time, Stacy still owed Jessica $2,000 for the purchase price of the goods, the value of which was $1,500. a. May the trustee invalidate Jessica’s security interest? If so, under what provision? b. If the security interest is invalidated, what is Jessica’s status in the bankruptcy proceeding? c. If the security interest is not invalidated, what is Jessica’s status in the bankruptcy proceeding?
Lucas writes a check to Paige for $250. The face of the check says, "pay to the order of Paige." Paige signs the check on the back and heads to the bank. Before Paige gets to the bank, however, Paige loses the check. Paige is not really worried, though, because the check is made out to her. If Carla finds the check and tries to cash it, Carla will: be able to cash the check because it is bearer paper. X be able to cash the check because it is order paper. be unable to cash the check because it is bearer paper. be unable to cash the check because it is order paper.
During 2020, Jackie sent her brother Junnie $2,500 via a telegraphic transfer through El Banco Prieto. The bank’s remittance clerk made a mistake and credited Junnie with $250,000 which he promptly withdrew. The bank demanded the return of the mistakenly credited excess, but Junnie refused to do so. The BIR entered the picture and investigated Junnie. Would the BIR be correct if it determines that he earned a taxable income under the facts? No, it was not her fault that the funds in excess of $2,500 were credited to him. Yes, income is a taxable income regardless of the source No, he had no income because he had no right to the mistakenly credited funds. No, the funds in excess of $2,500 were in effect donated to her.
Sining stole a watch of Benita, then sold it to Goreng for the amount of 5,000. Goreng is in good faith. Can Sining recover the watch from Goreng?a. No, Goreng is good faithb. Yes, with reimbursement of 5,000 to Gorengc. Yes, without reimbursement of 5,000d. No, Sining need to file a court proceeding
Ann receives an unsolicited credi card in the mail and tosses it on her desk. Without Ann's permission, her roommate uses the card to spend $1000 on new clothes. Ann is liable for a$1000, b $500, c $50, d$0
Finley Motor Company sells an automobile to Sara and retains a security interest in it. The automobile is insured, and Finley is named beneficiary. Three days after the automobile is totally destroyed in an accident, Sara files a petition in bankruptcy. As between Finley and Sara’s trustee in bankruptcy, who is entitled to the insurance proceeds?
Althea writes a check to Handy Dan's Home Repair for $59.75 to cover the cost of having a window repaired in her home and gives the check to Dan, the owner of Handy Dan's Home Repair. Dan alters the check by changing the amount to $559.75. Dan then takes the check to Home Federal Savings and Loan, the bank on which the check is drawn, and cashes the check. This, of course, results in an extra $500 being withdrawn from Althea's account. Home Federal Savings and Loan will be responsible for: issuing a stop payment order on the check. debiting Althea's account $559.75, the entire amount of the check. debiting Althea's account for nothing. Because the check was altered, Althea is not entitled to any reimbursement. debiting Althea's account $500.
Jake is an IRS tax law - certified volunteer preparer at a VITA/TCE site. When preparing a return for Jill, Jake learns that Jill does not have a bank account to receive a direct deposit of her refund. Jill is distraught when Jake tells her the paper refund check will take three to four weeks longer than the refund being direct deposited. Jill asks Jake if he can deposit her refund in his bank account and then turn the money over to her when he gets it. What should Jake do?
Amy is a creditor of Bia. In order to escape the liability to Amy, Bia sells all his property to Cathy. May Amy ask for rescission of the contract of sale between Bia and Cathy? * Yes even if the right of levy and execution and accion subrogatoria are still available. Yes because creditors are protected in cases of contracts intended to defraud them. No because Amy is not a party to the contract. No because Amy has no right of rescission.
Bill is cleaning his basement and finds an old vase. Believing the vase is worthless he sells it for $50.00. Later he discovers that the vase was really worth $25,000. Bill will be able to: A) recover $25,000. B) not recover anything because mistakes in judgement as to value do not permit you to avoid a contract. C) rescind the contract D) all of the above

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