Questions from Federal Taxation

Q: What is the justification for Sec. 1033, which allows a

What is the justification for Sec. 1033, which allows a taxpayer to elect to defer a gain resulting from an involuntary conversion? May a taxpayer elect under Sec. 1033 to defer recognition of a loss...

Q: Must property be actually condemned for the conversion of property to be

Must property be actually condemned for the conversion of property to be classified as an involuntary conversion? Explain.

Q: The functional use test is often used to determine whether the replacement

The functional use test is often used to determine whether the replacement property is similar or related in service or use to the property converted. Explain the functional use test.

Q: In what situations may a gain due to an involuntary conversion of

In what situations may a gain due to an involuntary conversion of real property be deferred if like-kind property is purchased to replace the converted property?

Q: One reason Congress expanded the exclusion of gain on the sale of

One reason Congress expanded the exclusion of gain on the sale of a principal residence and eliminated the deferral provision was to eliminate the need for many taxpayers to keep records of capital im...

Q: Does the IRS acquiesce in decisions of U.S. district

Does the IRS acquiesce in decisions of U.S. district courts?

Q: Steve maintains that the cost of wallpapering his three-bedroom house

Steve maintains that the cost of wallpapering his three-bedroom house is a capital expenditure while Martha maintains that the cost of wallpapering her three-bedroom house is an expense. Steve uses hi...

Q: The Nelsons purchased a new residence in 1992 for $300,

The Nelsons purchased a new residence in 1992 for $300,000 from David who owned and used the residence as rental property. When the Nelsons wanted to purchase the property, it was being rented to tena...

Q: What requirements must be satisfied by an unmarried taxpayer under Sec.

What requirements must be satisfied by an unmarried taxpayer under Sec. 121 to be eligible for the election to exclude a gain up to $250,000 on the sale or exchange of a principal residence?

Q: Prior to the Taxpayer Relief Act of 1997, taxpayers could defer

Prior to the Taxpayer Relief Act of 1997, taxpayers could defer a gain on the sale of a principal residence sold before May 7, 1997, if they purchased and occupied a new principal residence within two...