Questions from Federal Taxation

Q: The City of Omaha donates land worth $500,000 to

The City of Omaha donates land worth $500,000 to Ace Corporation to induce it to locate in Omaha and create an estimated 2,000 jobs for its citizens. a. How much income, if any, must Ace report on th...

Q: How will a partner’s distributive share be determined if the partner sells

How will a partner’s distributive share be determined if the partner sells one-half of his or her beginning-of-the-year partnership interest at the beginning of the tenth month of the partnership’s ta...

Q: The ABC Partnership has a nonrecourse liability that it incurred by borrowing

The ABC Partnership has a nonrecourse liability that it incurred by borrowing from an unrelated bank. It is secured by an apartment building owned and managed by the partnership. The liability is not...

Q: Roy’s father gives him a capital interest in the Family Partnership.

Roy’s father gives him a capital interest in the Family Partnership. Discuss whether the Sec. 704(e) family partnership rules apply to this interest.

Q: Andrew gives his brother Steve a 20% interest in the AS

Andrew gives his brother Steve a 20% interest in the AS Partnership, and he retains a 30% interest. Andrew works for the partnership but is not paid. How will this arrangement affect the income from t...

Q: The TUV Partnership is considering two compensation schemes for Tracy, the

The TUV Partnership is considering two compensation schemes for Tracy, the partner who runs the business on a daily basis. Tracy can be given a $10,000 guaranteed payment, or she can be given a compar...

Q: P Corporation acquires all of S Corporation’s stock at the beginning of

P Corporation acquires all of S Corporation’s stock at the beginning of the current year in a transaction that qualifies as a Sec. 382 ownership change. P and S elect to file a consolidated tax return...

Q: Bob and Carol want to open a bed and breakfast inn as

Bob and Carol want to open a bed and breakfast inn as soon as they buy and renovate a turn-of the-century home. What would be the major disadvantage of using a general partnership rather than a corpor...

Q: Sam wants to help his brother, Lou, start a new

Sam wants to help his brother, Lou, start a new business. Lou is a capable auto mechanic but has little business sense, so he needs Sam to help him make business decisions. Should this partnership be...

Q: Doug contributes services but no property to the CD Partnership upon its

Doug contributes services but no property to the CD Partnership upon its formation. What are the tax implications of his receiving only a profits interest versus his receiving a capital and profits in...