Questions from Federal Taxation

Q: Assume a taxpayer sells equipment used in a trade or business for

Assume a taxpayer sells equipment used in a trade or business for a gain that is less than the depreciation allowed. If the taxpayer is a corporation, will a greater amount of Sec. 1245 income be reco...

Q: Which official publication(s) contain(s) the following

Which official publication(s) contain(s) the following: a. Transcripts of Senate floor debates b. IRS announcements c. Tax Court regular opinions d. Treasury decisions e. U.S. district court opin...

Q: Carlos owns equipment with an $800,000 acquisition cost,

Carlos owns equipment with an $800,000 acquisition cost, a $270,000 adjusted basis, and a $500,000 FMV. Carlos makes a gift of the equipment to a charitable organization. The equipment is used by the...

Q: When a taxpayer disposes of oil, gas, or geothermal property

When a taxpayer disposes of oil, gas, or geothermal property, part or all of the gain may be recaptured as ordinary income. Explain how the recapture amount is determined for oil and gas and geotherma...

Q: William owns two appreciated assets, land and a building, which

William owns two appreciated assets, land and a building, which have been used in his trade or business since purchased in 1990. If he sells the two assets to his 100%-owned corporation, will William...

Q: Ted owns a warehouse that cost $850,000 in 1984

Ted owns a warehouse that cost $850,000 in 1984 and is subject to depreciation recapture under Sec. 1245. The warehouse, which has an adjusted basis of zero, is destroyed by a tornado and Ted receives...

Q: Explain how the gain on the sale or exchange of land could

Explain how the gain on the sale or exchange of land could be classified as either ordinary income, a Sec. 1231 gain, or a LTCG, depending on the facts and circumstances.

Q: Alice owns timber, purchased six years ago, with an adjusted

Alice owns timber, purchased six years ago, with an adjusted basis of $50,000. The timber is cut for use in her furniture business on October 1, when the FMV of the timber is $200,000. The FMV of the...

Q: Explain how the gain from an involuntary conversion of business property held

Explain how the gain from an involuntary conversion of business property held more than one year is taxed if the involuntary conversion is the result of a condemnation. Explain the tax treatment if th...

Q: Carlie who is single has a Sec. 1231 gain of $

Carlie who is single has a Sec. 1231 gain of $10,000 and no Sec. 1231 losses during the current year. Explain why the gain might be taxed at (a) 15%, (b) 39.6%, (c) 25%, (d) 20%, or (e) zero.