Questions from Federal Taxation

Q: Samantha is the president and sole shareholder of Toucan Corporation. She

Samantha is the president and sole shareholder of Toucan Corporation. She is paid an annual salary of $500,000, while her son, Aaron, the company’s chief financial officer, is paid a salary of $290,00...

Q: Cooper National is incorporated in Alabama. It generated a $5

Cooper National is incorporated in Alabama. It generated a $5 million profit on its overseas operations this year. Cooper paid the following to various other countries. • $1 million in income taxes. •...

Q: Whether compensation paid to a corporate employee is reasonable is a question

Whether compensation paid to a corporate employee is reasonable is a question of fact to be determined from the surrounding circumstances. How would the resolution of this problem be affected by each...

Q: On January 1, 2008, Stephanie Bridges acquired depreciable real property

On January 1, 2008, Stephanie Bridges acquired depreciable real property for $50,000. She used straight-line depreciation to compute the asset’s cost recovery. The asset was sold for $96,000 on Januar...

Q: Pink Corporation has several employees. Their names and salaries are listed

Pink Corporation has several employees. Their names and salaries are listed below. Judy…………………………………………………$470,000 Holly (Judy’s daughter)……………………….100,000 Terry (Judy’s son)……………………………….100,000 John...

Q: Helene and Pauline are twin sisters who live in Louisiana and Mississippi

Helene and Pauline are twin sisters who live in Louisiana and Mississippi, respectively. Helene is married to Frank, and Pauline is married to Richard. Frank and Richard are killed in an auto accident...

Q: Chao, Louis, and Mari, unrelated individuals, own all

Chao, Louis, and Mari, unrelated individuals, own all of the shares of Cerise Corporation. All three shareholders have been active in the management of Cerise since its inception. In the current year,...

Q: What is the significance of the term material participation? Why is

What is the significance of the term material participation? Why is the extent of a taxpayer’s participation in an activity important in determining whether a loss from the activity is deductible or n...

Q: Do the stock attribution rules apply to all stock redemptions? Explain

Do the stock attribution rules apply to all stock redemptions? Explain.

Q: Briefly discuss the requirements for a redemption to qualify as a not

Briefly discuss the requirements for a redemption to qualify as a not essentially equivalent redemption.