Questions from Federal Taxation

Q: Kristen, the president and sole shareholder of Egret Corporation, has

Kristen, the president and sole shareholder of Egret Corporation, has earned a salary bonus of $30,000 for the current year. Because of the lower tax rates on qualifying dividends, Kristen is consider...

Q: Julio Gonzales is in the 33% tax bracket. He acquired

Julio Gonzales is in the 33% tax bracket. He acquired 2,000 shares of stock in Gray Corporation seven years ago at a cost of $50 per share. In the current year, Julio received a payment of $150,000 fr...

Q: How would your answer to parts (a) and (b

How would your answer to parts (a) and (b) of Problem 49 differ if Julio were a corporate shareholder (in the 34% tax bracket) rather than an individual shareholder and the stock ownership in Gray Cor...

Q: Silver Corporation has 2,000 shares of common stock outstanding.

Silver Corporation has 2,000 shares of common stock outstanding. Howard owns 600 shares, Howard’s grandfather owns 300 shares, Howard’s mother owns 300 shares, and Howard’s son owns 100 shares. In add...

Q: Shonda owns 1,000 of the 1,500 shares outstanding

Shonda owns 1,000 of the 1,500 shares outstanding in Rook Corporation (E & P of $1 million). Shonda paid $50 per share for the stock seven years ago. The remaining stock in Rook is owned by unrelated...

Q: Jayden, a calendar year taxpayer, paid $16,000

Jayden, a calendar year taxpayer, paid $16,000 in medical expenses and sustained a $20,000 casualty loss in 2017. He expects $12,000 of the medical expenses and $14,000 of the casualty loss to be reim...

Q: Alicia sold her personal residence to Rick on June 30 for $

Alicia sold her personal residence to Rick on June 30 for $300,000. Before the sale, Alicia paid the real estate tax of $4,380 for the calendar year. For income tax purposes, the deduction is apportio...

Q: Rita retired from public accounting after a long and successful career of

Rita retired from public accounting after a long and successful career of 45 years. As part of her retirement package, she continues to share in the profits and losses of the firm, albeit at a lower r...

Q: Stork Corporation (E & P of $850,000)

Stork Corporation (E & P of $850,000) has 1,000 shares of common stock outstanding. The shares are owned by the following individuals: Lana Johnson, 400 shares; Lori Jones (Lana’s mother), 200 shares;...

Q: Cyan Corporation (E & P of $700,000)

Cyan Corporation (E & P of $700,000) has 4,000 shares of common stock outstanding. The shares are owned as follows: Angelica, 2,000 shares; Dean (Angelica’s son), 1,500 shares; and Walter (Angelica’s...