Questions from Federal Taxation

Q: Evaluate the validity of the following statements: If the stock received

Evaluate the validity of the following statements: If the stock received under an incentive stock option (ISO) is sold in the year of exercise, there is no AMT adjustment. If the stock is sold in a la...

Q: Howard’s roadside vegetable stand (adjusted basis of $275,000

Howard’s roadside vegetable stand (adjusted basis of $275,000) is destroyed by a tractor-trailer accident. He receives insurance proceeds of $240,000 ($300,000 fair market value $60,000 coinsurance)....

Q: In 1998, Douglas purchased an office building for $500,

In 1998, Douglas purchased an office building for $500,000 to be used in a business. Douglas sells the building in the current tax year. Explain why the recognized gain or loss for regular income tax...

Q: Celine will be subject to the AMT in 2017. She owns

Celine will be subject to the AMT in 2017. She owns an investment building and is considering disposing of it and investing in other realty. Based on an appraisal of the building’s value, the realized...

Q: Matt, who is single, always has elected to itemize deductions

Matt, who is single, always has elected to itemize deductions rather than take the standard deduction. In prior years, his itemized deductions always exceeded the standard deduction by a substantial a...

Q: Wesley, who is single, listed his personal residence with a

Wesley, who is single, listed his personal residence with a real estate agent on March 3, 2017, at a price of $390,000. He rejected several offers in the $350,000 range during the summer. Finally, on...

Q: A friend tells you that she does not worry about the AMT

A friend tells you that she does not worry about the AMT because she does not itemize deductions and, as a result, she does not generate many AMT adjustments. Evaluate your friend’s assertion.

Q: Joan is a self-employed consultant. What is her exposure

Joan is a self-employed consultant. What is her exposure to the Federal selfemployment tax? Discuss the tax rates that apply to Joan’s profits and the income base amounts for the year.

Q: During the year, Ricardo made the following contributions to a qualified

During the year, Ricardo made the following contributions to a qualified public charity: Cash……………………………………………………………………………………$220,000 Stock in Seagull, Inc. (a publicly traded corporation)………………280,0...

Q: During the year, Rachel earned $18,000 of interest

During the year, Rachel earned $18,000 of interest income on 2011 private activity bonds. She incurred interest expense of $7,000 in connection with amounts borrowed to purchase the bonds. What is the...