Questions from Federal Taxation

Q: Kristin Graf (123 Baskerville Mill Road, Jamison, PA 18929

Kristin Graf (123 Baskerville Mill Road, Jamison, PA 18929) is trying to decide how to invest a $10,000 inheritance. One option is to make an additional investment in Rocky Road Excursions in which sh...

Q: The end of the year is approaching, and Maxine has begun

The end of the year is approaching, and Maxine has begun to focus on ways of minimizing her income tax liability. Several years ago she purchased an investment in Teal Limited Partnership, which is su...

Q: If depreciable equipment used in a business is sold at a recognized

If depreciable equipment used in a business is sold at a recognized gain on July 10, 2017, and it was purchased on August 21, 2016, does § 1245 depreciation recapture apply to the asset? Explain.

Q: Jasmine owned rental real estate that she sold to her tenant in

Jasmine owned rental real estate that she sold to her tenant in an installment sale. Jasmine acquired the property in 2005 for $400,000; took $178,000 of depreciation on it; and sold it for $210,000,...

Q: Kareem owns a pickup truck that he uses exclusively in his business

Kareem owns a pickup truck that he uses exclusively in his business. The adjusted basis is $22,000, and the fair market value is $14,000. Kareem exchanges the truck for another truck that he will use...

Q: A number of years ago, Lee acquired a 20% interest

A number of years ago, Lee acquired a 20% interest in the BlueSky Partnership for $60,000. The partnership was profitable through 2016, and Lee’s amount at risk in the partnership interest was $120,00...

Q: Grace acquired an activity four years ago. The loss from the

Grace acquired an activity four years ago. The loss from the activity is $50,000 in the current year (at-risk basis of $40,000 as of the beginning of the year). Without considering the loss from the a...

Q: Jonathan, a physician, earns $200,000 from his

Jonathan, a physician, earns $200,000 from his practice. He also receives $18,000 in dividends and interest from various portfolio investments. During the year, he pays $45,000 to acquire a 20% intere...

Q: Mason Gregg’s car was destroyed by a flood. Unfortunately, his

Mason Gregg’s car was destroyed by a flood. Unfortunately, his insurance had lapsed two days before he incurred the loss. Mason uses his car for both business and personal use. Mason, who is self-empl...

Q: Five years ago Gerald invested $150,000 in a passive

Five years ago Gerald invested $150,000 in a passive activity, his sole investment venture. On January 1, 2016, his amount at risk in the activity was $30,000. His shares of the income and losses were...