Questions from Federal Taxation

Q: For the last five years, Mr. and Mrs. Cockrell

For the last five years, Mr. and Mrs. Cockrell rented their furnished basement to local college students. When determining their taxable income each year, they deducted a portion of the utilities, pro...

Q: Consider the following information for Mr. and Mrs. Di Palma

Consider the following information for Mr. and Mrs. Di Palma: • On June 10, 2016, they sold their principal residence for $80,000 and incur $6,000 of selling expenses. The basis of the residence, a...

Q: Martin owns equipment used in his trade or business purchased four years

Martin owns equipment used in his trade or business purchased four years ago for $200,000. Martin sells the equipment in the current year for $110,000 when its adjusted basis is $52,000. No other sale...

Q: The LaPoint Corporation placed in service $350,000 of used

The LaPoint Corporation placed in service $350,000 of used equipment (seven-year recovery property) on June 3, 2016 and elected to expense $250,000 as Sec. 179 depreciation expense. LaPoint sold the e...

Q: Beach Corporation owns a computer with a $34,000 adjusted

Beach Corporation owns a computer with a $34,000 adjusted basis. The computer is used in the company’s trade or business. What is the realized and recognized gain or loss for each of the following ind...

Q: Joseph Allen, who is single, purchased his first house in

Joseph Allen, who is single, purchased his first house in Orono, ME one year ago for $200,000. Katahdin wants to purchase the house for $360,000. Refer to the regulations to determine if he may exclud...

Q: Boise Corporation exchanges a machine with a $14,000 basis

Boise Corporation exchanges a machine with a $14,000 basis for a new machine with an $18,000 FMV and $3,000 cash. The machines are used in Boise’s business and are in the same General Asset Class. a....

Q: Lithuania Corporation operates a ferry service and owns four barges. Lithuania

Lithuania Corporation operates a ferry service and owns four barges. Lithuania exchanges one of the barges with an adjusted basis of $350,000 for a used smaller barge with a FMV of $444,000 and a $26,...

Q: Vivian’s AGI is $40,000 without considering the gains and

Vivian’s AGI is $40,000 without considering the gains and losses below. Determine her revised AGI after the inclusion of any applicable gains or losses for the following independent...

Q: Which of the following transactions or events is treated as a Sec

Which of the following transactions or events is treated as a Sec. 1231 gain or loss? All assets are held for more than one year. a. Theft of uninsured diamond ring, with an $800 basis and a $1,000 F...