Questions from Federal Taxation

Q: Dove Corporation (E & P of $800,000)

Dove Corporation (E & P of $800,000) has 1,000 shares of stock outstanding. The shares are owned as follows: Julia, 600 shares; Maxine (Julia’s sister), 300 shares; and Janine (Julia’s daughter), 100...

Q: Bryan and Cody each contributed $120,000 to the newly

Bryan and Cody each contributed $120,000 to the newly formed BC Partnership in exchange for a 50% interest. The partnership used the available funds to acquire equipment costing $200,000 and to fund c...

Q: Pablo has a $63,000 basis in his partnership interest

Pablo has a $63,000 basis in his partnership interest. On May 9 of the current tax year, the partnership distributes to him, in a proportionate current distribution, cash of $25,000, cash basis receiv...

Q: Upward and Onward, Inc., a § 501(c)(

Upward and Onward, Inc., a § 501(c)(3) organization that provides training programs for welfare recipients, reports the following income and expenses from the sale of products associated with the trai...

Q: USCo incurred $100,000 in interest expense for the current

USCo incurred $100,000 in interest expense for the current year. The tax book value of USCo’s assets generating foreign-source income is $5 million. The tax book value of USCo’s assets generating U.S....

Q: Discuss the adjustments that must be made to a partner’s basis in

Discuss the adjustments that must be made to a partner’s basis in the partnership interest. When are such adjustments made? Why?

Q: Legends Corporation owns and operates two manufacturing facilities, one in State

Legends Corporation owns and operates two manufacturing facilities, one in State A and the other in State B. Due to a temporary decline in sales, Legend has rented 25% of its State A facility to an un...

Q: Your client, Ecru Limited, uses a small sales force to

Your client, Ecru Limited, uses a small sales force to solicit sales of its wholesale restaurant supplies. Ecru is based in State W, and the sales representatives are assigned territories in States X,...

Q: What is a partner’s capital account? Describe how a partner’s ending

What is a partner’s capital account? Describe how a partner’s ending capital account balance is determined.

Q: When is partnership income subject to self-employment tax or the

When is partnership income subject to self-employment tax or the net investment income tax by an individual partner?