Questions from Federal Taxation

Q: Wanda, a calendar year taxpayer, owned a building (adjusted

Wanda, a calendar year taxpayer, owned a building (adjusted basis of $250,000) in which she operated a bakery that was destroyed by fire in December 2017. She receives insurance proceeds of $290,000 f...

Q: Kiki, who incurred intangible drilling costs (IDC) of $

Kiki, who incurred intangible drilling costs (IDC) of $94,000 during the year, deducted that amount for regular tax purposes. Her net oil and gas income for the year was $110,000. Kiki has calculated...

Q: Dimitri owns a gold mine that qualifies for a 15% percentage

Dimitri owns a gold mine that qualifies for a 15% percentage depletion rate. The basis of the property at the beginning of the year, prior to any current year depletion deduction, is $21,000. Gross in...

Q: Yanni, a single individual, reports the following information for the

Yanni, a single individual, reports the following information for the tax year. Salary……………………………………….$80,000 State income taxes…………………...…..6,800 Mortgage interest expense…………….6,200 Charitable cont...

Q: Elijah, who is single, holds a $12,000

Elijah, who is single, holds a $12,000 AMT credit available from year 1. For year 2, Elijah’s regular tax liability is $28,000, and his TMT is $24,000. Does Elijah owe any AMT for year 2? If so, how m...

Q: Compute the 2017 AMT exemption for the following taxpayers. a

Compute the 2017 AMT exemption for the following taxpayers. a. Bristol, who is single, reports AMTI of $149,500. b. Marley and Naila are married and file a joint tax return. Their AMTI is $498,000.

Q: In March 2017, Serengeti exercised an ISO that had been granted

In March 2017, Serengeti exercised an ISO that had been granted by his employer, Thunder Corporation, in December 2014. Serengeti acquired 5,000 shares of Thunder stock with a strike price of $65 per...

Q: This year, Brennen sold a machine used in his business for

This year, Brennen sold a machine used in his business for $180,000. The machine was put into service eight years ago for $340,000. Depreciation up to the date of the sale for regular income tax purpo...

Q: Robert A. Kliesh, age 41, is single and has

Robert A. Kliesh, age 41, is single and has no dependents. Robert’s Social Security number is 111-11-1112. His address is 201 Front Street, Missoula, MT 59812. He does not contribute to the Presidenti...

Q: Jacob, age 42, and Jane Brewster, age 37,

Jacob, age 42, and Jane Brewster, age 37, are married and file a joint return in 2017. The Brewsters have two dependent children, Ellen and Sean, 10-year-old twins. Jacob is a factory supervisor; he e...