Questions from Federal Taxation

Q: Mark owns all the stock of Red and Green Corporations. In

Mark owns all the stock of Red and Green Corporations. In each of the past five years, Red has reported approximately $125,000 of taxable income, and Green has reported NOLs of about $30,000. One-thir...

Q: Angela owns all the stock of A, B, and P

Angela owns all the stock of A, B, and P Corporations. P has owned all the stock of S1 Corporation for six years. The P-S1 affiliated group has filed a consolidated tax return in each of these six yea...

Q: P, R, and T Corporations have filed a consolidated tax

P, R, and T Corporations have filed a consolidated tax return for a number of years using the calendar year as its tax year. Current plans call for P to purchase all of X Corporation’s stock at the cl...

Q: Anna, one of your firm’s clients, is a physician who

Anna, one of your firm’s clients, is a physician who owns and operates her practice through a professional service corporation (PSC). She sees opportunities to grow the PSC, allowing her to serve more...

Q: Sandra and John, who are unrelated, each own 50%

Sandra and John, who are unrelated, each own 50% of Alpha Corporation’s stock and 50% of Beta Corporation’s stock. For five years, Alpha has conducted manufacturing activities and sold machine parts p...

Q: Abe and Brenda formed the AB Partnership ten years ago as a

Abe and Brenda formed the AB Partnership ten years ago as a general partnership and have been very successful with the business. However, in the current year, economic conditions caused them to lose s...

Q: On the advice of his attorney, Dr. Andres, a

On the advice of his attorney, Dr. Andres, a local pediatrician, contributed several office buildings, which he had previously owned as sole proprietor, to a new Andres Partnership in which he became...

Q: Charles and Mary formed CM Partnership on January 1 of the current

Charles and Mary formed CM Partnership on January 1 of the current year. Charles contributed Inventory A with a $100,000 FMV and a $70,000 adjusted basis for a 40% interest, and Mary contributed $150,...

Q: Rick has a $50,000 basis in the RKS General

Rick has a $50,000 basis in the RKS General Partnership on January 1 of the current year, and he owns no other investments. He has a 20% capital interest, a 30% profits interest, and a 40% loss intere...

Q: Which of the following items can be deducted (up to $

Which of the following items can be deducted (up to $5,000) and amortized as part of a partnership’s organizational expenditures? a. Legal fees for drawing up the partnership agreement b. Accounting...