Questions from Federal Taxation

Q: Kamal is starting a new business which will operate as an S

Kamal is starting a new business which will operate as an S corporation. This means that income earned by the corporation will be reported by shareholders even if they do not receive distributions. Ka...

Q: Vincent pays $20,000 for equipment to use in his

Vincent pays $20,000 for equipment to use in his trade or business. He pays sales tax of $800 as a result of the purchase. Must the $800 sales tax be capitalized as part of the purchase price?

Q: Sergio owns 200 shares of Palm Corporation common stock, purchased during

Sergio owns 200 shares of Palm Corporation common stock, purchased during the prior year: 100 shares on July 5, for $9,000; and 100 shares on October 15, for $12,000. When Sergio sells 50 shares for $...

Q: Martha owns 500 shares of Columbus Corporation common stock at the beginning

Martha owns 500 shares of Columbus Corporation common stock at the beginning of the year with a basis of $82,500. During the year, Columbus declares and pays a 10% nontaxable stock dividend. What is h...

Q: Without considering the following capital gains and losses, Charlene, who

Without considering the following capital gains and losses, Charlene, who is single, has taxable income of $460,000 and a marginal tax rate of 39.6%. During the year, she sold stock held for nine mont...

Q: Bud received 200 shares of Georgia Corporation stock from his uncle as

Bud received 200 shares of Georgia Corporation stock from his uncle as a gift on July 20, 2016, when the stock had a $45,000 FMV. His uncle paid $30,000 for the stock on April 12, 2001. The taxable gi...

Q: The Internal Revenue Code is the most authoritative source of income tax

The Internal Revenue Code is the most authoritative source of income tax law. In trying to resolve an income tax question, however, a tax researcher, also consults administrative rulings (Income Tax R...

Q: Daniel receives 400 shares of A&M Corporation stock from his

Daniel receives 400 shares of A&M Corporation stock from his aunt on May 20, 2017, as a gift when the stock has a $60,000 FMV. His aunt purchased the stock in 2007 for $42,000. The taxable gift is $60...

Q: In reference to tax research, what is meant by the best

In reference to tax research, what is meant by the best possible defensibly correct solution?

Q: Three years ago, Paul Wilde exercised all his stock options in

Three years ago, Paul Wilde exercised all his stock options in the start up company he helped establish and walked away with over $100 million. Since that time, he has spent all his energy, time, and...