Questions from Federal Taxation

Q: Lance Corporation’s management has asked whether they may change their inventory valuation

Lance Corporation’s management has asked whether they may change their inventory valuation method to LIFO. They now report their inventory using FIFO. If they can change, how would they go about it? H...

Q: Jane loans $80,000 to John, her son,

Jane loans $80,000 to John, her son, to permit him to purchase a principal residence. The loan principal is secured by John’s residence, but the agreement does not specify any interest. The applicable...

Q: Eagle and Hill Corporations discuss the terms of a land sale,

Eagle and Hill Corporations discuss the terms of a land sale, and they agree to a price of $230,000. Eagle wants to use the installment sale method, but is not sure Hill is a reliable borrower. As a r...

Q: May a taxpayer appeal a case litigated under the Small Cases Procedure

May a taxpayer appeal a case litigated under the Small Cases Procedure of the Tax Court?

Q: Texas Corporation disassembles old automobiles for the purpose of reselling their components

Texas Corporation disassembles old automobiles for the purpose of reselling their components (i.e., different types of metals, plastics, rubber, and other materials). Texas sells some of the items for...

Q: Apple Corporation has never been audited before the current year. An

Apple Corporation has never been audited before the current year. An audit is now needed from a CPA because the company is expanding rapidly and plans to issue stock to the public in a secondary offer...

Q: Linda is selling land she has owned for many years. The

Linda is selling land she has owned for many years. The land cost $80,000 and will sell for $200,000. The buyer has offered to pay $100,000 down and pay the balance next year plus interest at 8%. Assu...

Q: Leon has a substantial portfolio of stocks and bonds as well as

Leon has a substantial portfolio of stocks and bonds as well as cash from some bonds that have recently matured. He has been looking at investing $200,000 in corporate bonds that pay 7% interest. The...

Q: The Electric Corporation, a publicly held corporation, owns land with

The Electric Corporation, a publicly held corporation, owns land with a $1,600,000 basis that is being held for investment. The company is considering exchanging the land for two assets owned by the Q...

Q: Paden, who is single and has been employed as an accountant

Paden, who is single and has been employed as an accountant for 27 years with Harper, Inc., lost his job due to company downsizing. His last day of employment is July 31, 2017, and Harper provides a $...