Questions from General Taxation

Q: Ray and Carin are partners in an accounting firm. The partners

Ray and Carin are partners in an accounting firm. The partners have entered into an arm’s length agreement requiring Ray to purchase Carin’s partnership interest from Carin’s estate if she dies before...

Q: Laura recently was diagnosed with cancer and has begun chemotherapy treatments.

Laura recently was diagnosed with cancer and has begun chemotherapy treatments. A cancer specialist has given Laura less than one year to live. She has incurred sizable medical bills and othe...

Q: Vic, who was experiencing financial difficulties, was able to adjust

Vic, who was experiencing financial difficulties, was able to adjust his debts as follows. Determine the Federal income tax consequences to Vic. a. Vic is an attorney. Vic owed his uncle $25,000. The...

Q: During the year, Olivia recorded the following transactions involving capital assets

During the year, Olivia recorded the following transactions involving capital assets. Gain on the sale of unimproved land (held as an investment for 4 years) ……………………. $ 4,000 Loss on the sale of a...

Q: Andy reported the following gains and losses from the sale of capital

Andy reported the following gains and losses from the sale of capital assets. Loss on Pigeon Corporation stock (held 9 months) ……………………… ($14,000) Gain on painting (held for 2 years as an investment...

Q: Liz and Doug were divorced on July 1 of the current year

Liz and Doug were divorced on July 1 of the current year after 10 years of marriage. Their current year’s income received before the divorce included: Doug’s salary…………………………………………………………………………$41,00...

Q: Vella owns and operates an illegal gambling establishment. In connection with

Vella owns and operates an illegal gambling establishment. In connection with this activity, he has the following expenses during the year: Rent ………………………………………… $ 24,000 Bribes ………………………………………… 40,0...

Q: Stanford owns and operates two dry cleaning businesses. He travels to

Stanford owns and operates two dry cleaning businesses. He travels to Boston to discuss acquiring a restaurant. Later in the month, he travels to New York to discuss acquiring a bakery. Stanford does...

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: Selma operates a contractor’s supply store. She maintains her books using

Selma operates a contractor’s supply store. She maintains her books using the cash method. At the end of the year, her accountant computes her accrual basis income that is used on her tax return. For...