Questions from Federal Taxation

Q: Cheers Corporation purchased for $500,000 5,000 shares

Cheers Corporation purchased for $500,000 5,000 shares of Beer Corporation common stock (less than 5% of the outstanding Beer stock) at the beginning of the current year. It used $400,000 of borrowed...

Q: In 2017, Ace Corporation reports gross income of $200,

In 2017, Ace Corporation reports gross income of $200,000 (including $150,000 of profit from its operations and $50,000 in dividends from less-than-20%-owned domestic corporations) and $220,000 of ope...

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

Beta Corporation reports the following results for the current year: Gross income from operations……………………………………………………$180,000 Dividends from less-than-20%-owned domestic corporations………100,000 Operat...

Q: Union Corporation sells a truck for $18,000 to Jane

Union Corporation sells a truck for $18,000 to Jane, who owns 70% of its stock. The truck has a $24,000 adjusted basis on the sale date. Jane sells the truck to an unrelated party, Mike, for $28,000 t...

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

Western Corporation reports the following results for the current year: Gross profits on sales…………………………………………$150,000 Long-term capital gain…………………………………………..8,000 Long-term capital loss………………………………...

Q: Alpha Corporation has been in business for two years. It incurred

Alpha Corporation has been in business for two years. It incurred the following items last year (Year 1): Gross profits on sales……………….$240,000 Operating expenses…………………..,100,000 Long-term capital g...

Q: Does Sec. 351 apply to property transfers to an existing corporation

Does Sec. 351 apply to property transfers to an existing corporation? Suppose Carl and Lynn each own 50 shares of North Corporation stock. Carl transfers property worth $50,000 to North for an additio...

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

Pace Corporation reports the following results for the current year: Gross profit on sales……………………………………………………..$120,000 Long-term capital loss……………………………………………………..10,000 Short-term capital loss…………...

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

Roper Corporation reports the following results for the current year: Gross profits on sales…………………………………………………..$80,000 Short-term capital gain………………………………………………….40,000 Long-term capital gain………………...

Q: Which of the following groups constitute controlled groups? (Any stock

Which of the following groups constitute controlled groups? (Any stock not listed below is held by unrelated individuals each owning less than 1% of the outstanding stock.) For brother-sister corporat...