Questions from Federal Taxation

Q: In the current year, Kappa Corporation earned $1 million of

In the current year, Kappa Corporation earned $1 million of net income before federal income taxes. This amount of book income includes a $100,000 expense for what the company considers an ordinary an...

Q: Young Corporation purchased residential real estate several years ago for $225

Young Corporation purchased residential real estate several years ago for $225,000, of which $25,000 was allocated to the land and $200,000 was allocated to the building. Young took straight-line MACR...

Q: Gamma Corporation sold the following property on March 3 of the current

Gamma Corporation sold the following property on March 3 of the current year: The corporation used the equipment, building, and land in its business and has held all the property for more than one ye...

Q: Delta Corporation incorporates on January 7, begins business on July 10

Delta Corporation incorporates on January 7, begins business on July 10, and elects to have its initial tax year end on October 31. Delta incurs the following expenses between January and October rela...

Q: Yellow Corporation donates the following property to the State University:

Yellow Corporation donates the following property to the State University: ABC Corporation stock purchased two years ago for $18,000. The stock, which trades on a regional stock exchange, has a $25,...

Q: Does Sec. 351 require shareholders to receive stock equal in value

Does Sec. 351 require shareholders to receive stock equal in value to the property transferred? Suppose Fred and Susan each transfer property worth $50,000 to Spade Corporation. In exchange, Fred rece...

Q: Blue Corporation donates the following property to Johnson Elementary School: XYZ

Blue Corporation donates the following property to Johnson Elementary School: XYZ Corporation stock purchased two years ago for $25,000. The stock has a $19,000 FMV on the contribution date. ABC Cor...

Q: Zeta Corporation reports the following results for Year 1 and Year 2

Zeta Corporation reports the following results for Year 1 and Year 2: The adjusted taxable income is before Zeta claims any charitable contributions deduction, NOL or capital loss carryback, dividend...

Q: Omega Corporation reports the following results for the current year:

Omega Corporation reports the following results for the current year: Gross profits on sales……………………………………………………………………$120,000 Dividends from less-than-20%-owned domestic corporations…………..40,000 Ope...

Q: Theta Corporation reports the following results for the current year:

Theta Corporation reports the following results for the current year: Gross profits on sales…………………………………………………………………….$220,000 Dividends from less-than-20%-owned domestic corporations…………..100,000 O...