Questions from General Taxation

Q: Last year, Anne purchased a condo unit for $125,

Last year, Anne purchased a condo unit for $125,000 as her personal residence. In the current year, the condo unit appraises at $132,000, and Anne moves out and converts the condo to rental property....

Q: Gordon Corporation had $102,000 of retained earnings at the

Gordon Corporation had $102,000 of retained earnings at the beginning of the year. It had $87,000 of financial accounting income and paid $45,000 in dividends. What is the corporation’s ending retaine...

Q: Nicko Corporation (a calendar-year corporation) purchased a new

Nicko Corporation (a calendar-year corporation) purchased a new machine (7-year property) in July 2014 for $20,000. Nicko did not elect Section 179 for this asset but did claim 50 percent bonus deprec...

Q: The Amble Corporation has $4,000 in current earnings and

The Amble Corporation has $4,000 in current earnings and profits and $23,000 in accumulated earnings and profits. It makes a $6,000 dividend distribution at the end of the year to its shareholders. Ho...

Q: Vanguard Corporation has excess land that it distributes to its shareholders as

Vanguard Corporation has excess land that it distributes to its shareholders as a dividend. Each of the four shareholders gets a portion of the land valued at $23,000 ($92,000 total value). The corpor...

Q: Carrie received 10 shares of Collie common stock as a 10 percent

Carrie received 10 shares of Collie common stock as a 10 percent dividend on the 100 common shares she currently owns. She paid $4,400 for the original shares. If she sells the 10 shares that she just...

Q: Jillian is an employee of Monrow Corporation (a calendar-year

Jillian is an employee of Monrow Corporation (a calendar-year corporation). In February 2017, Monrow purchased a new $37,000 car for Jillian’s use. During 2017 and 2018, 60 percent of Jillian’s mileag...

Q: Trish entered into a 36-month lease of an automobile on

Trish entered into a 36-month lease of an automobile on January 1. She uses it 90 percent for business and 10 percent for personal use. The fair market value of the automobile at the inception of the...

Q: Byron entered into a 36-month lease of an automobile on

Byron entered into a 36-month lease of an automobile on March 1, year 1. He used it 80 percent for business and 20 percent for personal use. In year 2 he used it 90 percent for business and 10 percent...

Q: Tina and Tony, a married couple, have owned and lived

Tina and Tony, a married couple, have owned and lived in their house for 20 years. They want to sell it now and move to a smaller place. They purchased the home for $56,000 and put $30,000 of improvem...