Questions from Federal Taxation

Q: Tabitha sells real estate on March 2 for $260,000

Tabitha sells real estate on March 2 for $260,000. The buyer, Ramona, pays the real estate taxes of $5,200 for the calendar year, which is the real estate property tax year. Assume that this is not a...

Q: How is passive activity defined in the Code? What aspects of

How is passive activity defined in the Code? What aspects of the definition have been clarified by final or Temporary Regulations?

Q: What is a real estate professional? Why could qualifying for this

What is a real estate professional? Why could qualifying for this status be beneficial under the passive activity loss rules?

Q: Since his college days, Charles has developed an entrepreneurial streak.

Since his college days, Charles has developed an entrepreneurial streak. After working in his family’s grocery business, he starts several ventures on his own. Even though Charles is independently wea...

Q: Brad owns a small townhouse complex that generates a loss during the

Brad owns a small townhouse complex that generates a loss during the year. Under what circumstances can Brad deduct a loss from the rental activity? What limitations apply?

Q: In connection with passive activities, what is a deduction equivalent and

In connection with passive activities, what is a deduction equivalent and how is it computed?

Q: What is investment interest expense? Describe the basic rules that may

What is investment interest expense? Describe the basic rules that may limit its deductibility.

Q: Jacob, a self-employed taxpayer, is married and has

Jacob, a self-employed taxpayer, is married and has two children. He has asked you to explain the tax and nontax advantages of creating a Health Savings Account (HSA) for him and his family.

Q: Surendra’s personal residence originally cost $340,000 (ignore land

Surendra’s personal residence originally cost $340,000 (ignore land). After living in the house for five years, he converts it to rental property. At the date of conversion, the fair market value of t...

Q: Identify two rules designed to limit the tax benefits a taxpayer may

Identify two rules designed to limit the tax benefits a taxpayer may obtain from a tax shelter investment. Describe how these rules reduce or defer the recognition of tax losses.