Questions from Federal Taxation

Q: Five years ago, Andy and Sandy, siblings, pooled their

Five years ago, Andy and Sandy, siblings, pooled their resources and purchased a warehouse. Andy provided $50,000 of consideration, and Sandy furnished $100,000. Andy died and was survived by Sandy. T...

Q: Fifteen years ago, Mrs. Cobb purchased land costing $80

Fifteen years ago, Mrs. Cobb purchased land costing $80,000. She had the land titled in the names of Mr. and Mrs. Cobb, joint tenants with right of survivor ship. Mrs. Cobb died and was survived by Mr...

Q: When Yuji died in March 2017, his gross estate was valued

When Yuji died in March 2017, his gross estate was valued at $8 million. He owed debts totaling $300,000. Funeral and administration expenses were $12,000 and $120,000, respectively. The marginal esta...

Q: Explain to a client in laymen’s language what portion of the income

Explain to a client in laymen’s language what portion of the income of an estate or trust is subject to taxation at the fiduciary level.

Q: What is the amount of the personal exemption for trusts and estates

What is the amount of the personal exemption for trusts and estates?

Q: Carmen’s current year individual return reports a $6,000 deduction

Carmen’s current year individual return reports a $6,000 deduction for a questionable item not relating to a tax-shelter. Carmen does not make a disclosure regarding this item. The IRS audits Carmen’s...

Q: Hal and Wanda, his wife, are in the 35%

Hal and Wanda, his wife, are in the 35% marginal tax bracket in the current year. Wanda fraudulently omits from their joint return $50,000 of gross income. Hal does not participate in or know of her f...

Q: Refer to the previous problem. Assume Frank subsequently commits fraud with

Refer to the previous problem. Assume Frank subsequently commits fraud with respect to his Year 1 return as late as October 8 of Year 3. When does the limitations period for charging Frank with crimin...

Q: Wilma earns no income in the current year but files a joint

Wilma earns no income in the current year but files a joint return with her husband, Hank. The return reports $40,000 of gross income and AGI, and $24,000 of taxable income. Hank realized $12,000 of g...

Q: Joe and Joan file a joint return for the current year.

Joe and Joan file a joint return for the current year. They are in the 35% marginal tax bracket. Unbeknownst to Joe, Joan fails to report on the return the $8,000 value of a prize she won. She, howeve...