The 2% cost of sale date occurs in which year?

• A. 1983
• B. 1984
• C. 1985
• D. 1986

Answer: (B)

The key idea is that some tax rules have a specific year when they take effect, and the date you use for rules like the 2% cost of sale is the year the rule becomes operative. In this material, the 2% cost of sale rule first applies in 1984, so the cost-of-sale date for relevant transactions is tied to that year. Earlier years don’t have this rule (or use a different effective date), and later years aren’t the year the item tests. That’s why 1984 is the best answer.