Questions from Federal Taxation

Q: Jebali Corporation, a calendar year taxpayer utilizing the completed contract method

Jebali Corporation, a calendar year taxpayer utilizing the completed contract method of accounting, constructed a building for Samson, Inc., under a longterm contract. The gross contract price was $2,...

Q: Shumpert, Inc., entered into a contract that was to take

Shumpert, Inc., entered into a contract that was to take two years to complete, with an estimated cost of $900,000. The contract price was $1,300,000. Costs of the contract for 2016, the first year, t...

Q: Delaine is a 90% shareholder in a personal service corporation (

Delaine is a 90% shareholder in a personal service corporation (PSC). The corporation paid Delaine a salary of $265,000 during its fiscal year ending September 30, 2017. a. Assume that the corporation...

Q: Gaffey Corporation obtained permission to change from a calendar year to a

Gaffey Corporation obtained permission to change from a calendar year to a fiscal year ending May 31, beginning in 2017. For the short period January 1 through May 31, 2017, the corporation’s taxable...

Q: Can the earned income credit be characterized as a form of negative

Can the earned income credit be characterized as a form of negative income tax? Why or why not?

Q: In 2017, Aurora received a $25,000 bonus computed

In 2017, Aurora received a $25,000 bonus computed as a percentage of profits. In 2018, Aurora’s employer determined that the 2017 profits had been incorrectly computed, and Aurora had to refund the $8...

Q: In 2017, Chaya Corporation, an accrual basis, calendar year

In 2017, Chaya Corporation, an accrual basis, calendar year taxpayer, provided services to clients and earned $25,000. The clients signed notes receivable to Chaya that have a fair market value of $22...

Q: Anne sold her home for $290,000 in 2017.

Anne sold her home for $290,000 in 2017. Selling expenses were $17,400. She purchased it in 2011 for $200,000. During the period of ownership, Anne had done the following: . Deducted $50,500 office-in...

Q: Thomas receives tangible personal property as an inheritance from a decedent who

Thomas receives tangible personal property as an inheritance from a decedent who died in 2017. The property was depreciated by the deceased, and Thomas will also depreciate it. At the date of the dece...

Q: Under what conditions would the cash method of accounting be advantageous as

Under what conditions would the cash method of accounting be advantageous as compared with the accrual basis?