Questions from Federal Taxation

Q: Melissa, the owner of a sole proprietorship, does not provide

Melissa, the owner of a sole proprietorship, does not provide health insurance for her 20 employees. She plans to spend $1,500 lobbying in opposition to legislation that would require her to provide s...

Q: Sparrow Corporation would like you to review its employee fringe benefits program

Sparrow Corporation would like you to review its employee fringe benefits program with regard to the tax consequences of the plan for the company’s president (Polly), who is also the majority sharehol...

Q: What limits exist on the deductibility of executive compensation? Do the

What limits exist on the deductibility of executive compensation? Do the limits apply to all types of business entities? Are there any exceptions to the limitations? Explain.

Q: Paul operates a restaurant in Cleveland. He travels to Columbus to

Paul operates a restaurant in Cleveland. He travels to Columbus to investigate acquiring a business. He incurs expenses as follows: $1,500 for travel, $2,000 for legal advice, and $3,500 for a market...

Q: Karen and Andy own a beach house. They have an agreement

Karen and Andy own a beach house. They have an agreement with a rental agent to rent it up to 200 days per year. For the past three years, the agent has been successful in renting it for 200 days. Kar...

Q: Why do taxpayers often have more than one alternative for structuring a

Why do taxpayers often have more than one alternative for structuring a business transaction?

Q: Hank was transferred from Arizona to North Dakota on March 1 of

Hank was transferred from Arizona to North Dakota on March 1 of the current year. He immediately put his home in Phoenix up for rent. The home was rented May 1 to November 30 and was vacant during the...

Q: Ray loses his job as a result of a corporate downsizing.

Ray loses his job as a result of a corporate downsizing. Consequently, he falls behind on the mortgage payments on his personal residence. His friend Ted would like to make the delinquent mortgage pay...

Q: Edna incurs various legal fees in obtaining a divorce. Which types

Edna incurs various legal fees in obtaining a divorce. Which types of expenses associated with the divorce are deductible by Edna, and which are not?

Q: Ella owns 60% of the stock of Peach, Inc.

Ella owns 60% of the stock of Peach, Inc. The stock has declined in value since she purchased it five years ago. She is going to sell 5% of the stock to a relative. Ella is also going to make a gift o...