Questions from Federal Taxation

Q: Chock, a U.S. corporation, purchases inventory for

Chock, a U.S. corporation, purchases inventory for resale from distributors within the United States and resells this inventory at a $1 million profit to customers outside the United States. Title to...

Q: Last year, Lory Corporation, a land development company, acquired

Last year, Lory Corporation, a land development company, acquired land and construction equipment from its sole shareholder in a § 351 transaction. At the time, the land had a basis of $790,000 and a...

Q: Sante Fe Corporation’s sales office and manufacturing plant are located in State

Sante Fe Corporation’s sales office and manufacturing plant are located in State A. Sante Fe also maintains a manufacturing plant and sales office in State B. For purposes of apporti...

Q: Prepare a PowerPoint presentation (maximum of six slides) entitled “

Prepare a PowerPoint presentation (maximum of six slides) entitled “Planning Principles for Our Multistate Clients.” The slides will be used to lead a 20-minute discussion with colleagues in the corpo...

Q: Assume the same facts as in Problem 31, except that both

Assume the same facts as in Problem 31, except that both states employ a three-factor formula, under which sales are double-weighted. The property factor in A is computed using historical cost, while...

Q: Night, Inc., a domestic corporation, earned $300,

Night, Inc., a domestic corporation, earned $300,000 from foreign manufacturing activities on which it paid $90,000 of foreign income taxes. Night’s foreign sales income is taxed at a 50% foreign tax...

Q: Heather sells land (adjusted basis, $75,000;

Heather sells land (adjusted basis, $75,000; fair market value, $95,000) to a partnership in which she controls an 80% capital interest. The partnership pays her only $50,000 for the land. a. How much...

Q: Seagull, Inc., a § 501(c)(3)

Seagull, Inc., a § 501(c)(3) exempt organization, uses a tax year that ends on October 31. Seagull’s gross receipts are $600,000, and related expenses are $580,000. a. Is Seagull required to file an a...

Q: Henrietta transfers cash of $75,000 and equipment with a

Henrietta transfers cash of $75,000 and equipment with a fair market value of $25,000 (basis to her as a sole proprietor, $10,000) in exchange for a 40% profit and loss interest worth $100,000 in a pa...

Q: Roger Corporation operates in two states, as indicated below. This

Roger Corporation operates in two states, as indicated below. This year’s operations generated $400,000 of apportionable income. Compute Roger’s State A taxable...