Questions from Federal Taxation

Q: Bob Jones has a small repair shop that he has run for

Bob Jones has a small repair shop that he has run for several years as a sole proprietorship. The proprietorship uses the cash method of accounting and the calendar year as its tax year. Bob needs add...

Q: Eric Wright conducts a dry cleaning business as a sole proprietorship.

Eric Wright conducts a dry cleaning business as a sole proprietorship. The business operates in a building that Eric owns. Last year, Eric mortgaged for $150,000 the building and the land on which the...

Q: What are the tax consequences for the transferor and transferee when property

What are the tax consequences for the transferor and transferee when property is transferred to a newly created corporation in an exchange qualifying as nontaxable under Sec. 351?

Q: Anne and Michael own and operate a successful mattress business. They

Anne and Michael own and operate a successful mattress business. They have decided to take the business public. They contribute all the assets of the business to newly formed Spring Corporation each i...

Q: Bob and Carl transfer property to Stone Corporation for 90% and

Bob and Carl transfer property to Stone Corporation for 90% and 10% of Stone stock, respectively. Pursuant to a binding agreement concluded before the transfer, Bob sells half of his stock to Carl. Pr...

Q: In an exchange qualifying for Sec. 351 tax-free treatment

In an exchange qualifying for Sec. 351 tax-free treatment, Greta receives 100 shares of White Corporation stock plus a right to receive another 25 shares. The right is contingent on the valuation of a...

Q: Your clients, Lisa and Matthew, are planning to form Lima

Your clients, Lisa and Matthew, are planning to form Lima Corporation. Lisa will contribute $50,000 cash to Lima for 50 shares of its stock. Matthew will contribute land having a $35,000 adjusted basi...

Q: John plans to transfer the assets and liabilities of his business to

John plans to transfer the assets and liabilities of his business to Newco in exchange for all of Newco’s stock. The assets have a $250,000 basis and an $800,000 FMV. John also plans to transfer $475,...

Q: Six years ago, Leticia, Monica, and Nathaniel organized Lemona

Six years ago, Leticia, Monica, and Nathaniel organized Lemona Corporation to develop and sell computer software. Each individual contributed $10,000 to Lemona in exchange for 1,000 shares of Lemona s...

Q: Jackson Corporation prepared the following book income statement for its year ended

Jackson Corporation prepared the following book income statement for its year ended December 31, 2017: • For tax: Seven-year MACRS property for which the corporation made no Sec....