Q: Dillion whose taxable income is less than $300,000 has
Dillion whose taxable income is less than $300,000 has a tax rate of 33% on his ordinary income and $40,000 of net nonrecaptured Sec. 1231 losses at the start of the year. During the year, he recogniz...
See AnswerQ: The Pear Corporation owns equipment with a $300,000 adjusted
The Pear Corporation owns equipment with a $300,000 adjusted basis. The equipment was purchased six years ago for $650,000. If Pear sells the equipment for the selling prices given in the three indepe...
See AnswerQ: Marc, age 45, sells his personal residence on May 15
Marc, age 45, sells his personal residence on May 15, 2017, for $180,000. He pays $8,000 in selling expenses and $900 in repair expenses to help sell the residence. He has lived in the residence since...
See AnswerQ: Alice and Bill plan to go into business together. For the
Alice and Bill plan to go into business together. For the first two or three years of operations, they anticipate losses, which they would like to use to offset income from other sources. They also ar...
See AnswerQ: John and Mary each exchange property worth $50,000 for
John and Mary each exchange property worth $50,000 for 100 shares of New Corporation stock. Peter exchanges services for 98 shares of New stock and $1,000 in cash for two shares of New stock. Are the...
See AnswerQ: X-Ray Corporation received a $100,000 dividend from
X-Ray Corporation received a $100,000 dividend from Yancey Corporation this year. X-Ray owns 10% of the Yancey’s single class of stock. What tax issues should X-Ray consider with respect to its divide...
See AnswerQ: Value Corporation is a calendar year taxpayer that uses the accrual method
Value Corporation is a calendar year taxpayer that uses the accrual method of accounting. On December 10 of the current year, Value accrues a bonus payment of $100,000 to Brett, its president and sole...
See AnswerQ: What is Beta Corporation’s income tax liability assuming its taxable income is
What is Beta Corporation’s income tax liability assuming its taxable income is (a) $94,000, (b) $300,000, and (c) $600,000. How would your answers change if Beta were a personal service corporation?
See AnswerQ: Fawn Corporation, a C corporation, paid no dividends and recognized
Fawn Corporation, a C corporation, paid no dividends and recognized no capital gains or losses in the current year. What is its income tax liability assuming its taxable income for the year is a. $50...
See AnswerQ: Beta Corporation purchased 100 shares of Gamma Corporation common stock (less
Beta Corporation purchased 100 shares of Gamma Corporation common stock (less than 5% of the outstanding stock) two days before the ex-dividend date for $200,000. Beta receives a $10,000 cash dividend...
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