Questions from Federal Taxation

Q: Would the straight-line MACRS method (using the ADS)

Would the straight-line MACRS method (using the ADS) be preferable to the regular MACRS method in the following cases? Explain. a. Ray incurs NOLs in his business for a number of years and has NOL ca...

Q: During the current year, Irene, a married individual who files

During the current year, Irene, a married individual who files a joint return, reports the following items of income and loss: Salary…………………………………………………………………………………$130,000 Activity X (passive)………………...

Q: Rudy is considering whether to make the election under Sec. 179

Rudy is considering whether to make the election under Sec. 179 to expense the maximum amount of the acquisition cost related to certain fixed asset additions. What advantages are associated with the...

Q: Luby Corporation has maintained an office in a leased building for several

Luby Corporation has maintained an office in a leased building for several years. The corporation has decided to make some significant leasehold improvements to enhance the property. How should Luby C...

Q: Your client is a self-employed attorney who is considering the

Your client is a self-employed attorney who is considering the purchase of a $32,000 automobile that will be used 80% of the time for business and a $4,000 personal computer that will be used 100% of...

Q: In recent years, Congress has enacted provisions in the tax law

In recent years, Congress has enacted provisions in the tax law that permitted bonus depreciation for certain assets. a. What types of assets typically qualified for bonus depreciation? b. How does...

Q: Circle Corporation, an accrual method taxpayer, manufactures and sells mainframe

Circle Corporation, an accrual method taxpayer, manufactures and sells mainframe computers. In January of the current year, Circle Corporation donates a mainframe that was part of its inventory to Cit...

Q: On March 1, 2017, Sarah entered into a three year

On March 1, 2017, Sarah entered into a three year lease of an automobile used exclusively in her business. The automobile’s FMV was $58,500 at the inception of the lease. Sarah made ten monthly lease...

Q: What difference does it make for income tax purposes whether an intangible

What difference does it make for income tax purposes whether an intangible asset is (1) acquired in connection with a business acquisition, (2) acquired by the purchase of an individual asset (e.g.,...

Q: In January of the current year, Park Corporation incurs $34

In January of the current year, Park Corporation incurs $34,000 of legal costs associated with a patent that was developed internally and has a legal life of 17 years. Park also acquired for cash the...