Questions from Federal Taxation

Q: Assume that the only precedents relating to a particular issue are as

Assume that the only precedents relating to a particular issue are as follows: Tax Court—decided for the taxpayer Eighth Circuit Court of Appeals—decided for the taxpayer (affirming the Tax Court) U.S...

Q: Hank sells equipment used in a trade or business for $25

Hank sells equipment used in a trade or business for $25,000. The equipment costs $30,000 and has an adjusted basis of $25,500. Why is it important to know the holding period?

Q: Karen purchased a computer three years ago for $15,300

Karen purchased a computer three years ago for $15,300 to use exclusively in her business. She expensed the entire cost of the computer under Sec. 179. If she sells the computer during the current yea...

Q: Sheila owns a motel that is used in a trade or business

Sheila owns a motel that is used in a trade or business. If she sells the motel, the gain will be Sec. 1245 ordinary income. During what period of time was the motel placed into service?

Q: Marty sells his fully depreciated building at a gain to an unrelated

Marty sells his fully depreciated building at a gain to an unrelated party. The building is purchased before 1981. Is any of the gain taxed as ordinary income?

Q: Which of the following assets (assume all assets have a holding

Which of the following assets (assume all assets have a holding period of more than one year) do not qualify as Sec. 1231 property: inventory, a pig held for breeding, land used as a parking lot for c...

Q: When is an office building subject to the depreciation recapture rules of

When is an office building subject to the depreciation recapture rules of Sec. 1245?

Q: Does a building that is 60% rented for residential use and

Does a building that is 60% rented for residential use and 40% for commercial use qualify as residential rental property?

Q: Roger owns an apartment complex with a FMV of $2 million

Roger owns an apartment complex with a FMV of $2 million. If he sells the apartment complex, $700,000 of the gain is Sec. 1231 gain with $600,000 taxed at 25% because it is unrecaptured Sec. 1250 gain...

Q: Rashad owns a duplex used 100% as residential rental property.

Rashad owns a duplex used 100% as residential rental property. Under what conditions, if any, will any gain that he recognizes be Sec. 1245 ordinary income?