Questions from Federal Taxation

Q: On October 21 of the current year, David receives stock of

On October 21 of the current year, David receives stock of Western Corporation as a gift from his grandfather, who acquired the stock on January 20, 1995. Under what conditions would David’s holding p...

Q: Why are the gift and estate taxes called wealth transfer taxes?

Why are the gift and estate taxes called wealth transfer taxes? What is the tax base for computing each of these taxes?

Q: Why is a thorough knowledge of sources of tax law so important

Why is a thorough knowledge of sources of tax law so important for a professional person who works in the tax area?

Q: Jack, a tenured university professor, has been a malcontent for

Jack, a tenured university professor, has been a malcontent for many years at Rockport University. The university has recently offered to pay $200,000 to Jack if he will relinquish his tenure position...

Q: Tom Williams is an equal partner in a partnership with the Kansas

Tom Williams is an equal partner in a partnership with the Kansas Corporation. Williams, an inventor, produced a new process while working for the partnership, which has been patented by the partnersh...

Q: Bart and Kesha, who are in the 39.6%

Bart and Kesha, who are in the 39.6% tax bracket, are interested in reducing their taxes. They are currently considering several alternatives. For each, indicate how much tax, if any, they would save....

Q: William owns a building that is leased to Lester’s Machine Shop.

William owns a building that is leased to Lester’s Machine Shop. Lester requests that William rewire the building for new equipment Lester plans to purchase. The wiring would cost about $4,000, but wo...

Q: Anna, age 65, who lives with her unmarried son,

Anna, age 65, who lives with her unmarried son, Mario, received $7,000, which was used for her support during the year. The sources of support were as follows: Social Security benefits ………………………. $1,...

Q: Jim inherits stock (a capital asset) from his brother,

Jim inherits stock (a capital asset) from his brother, who died in March of 2017, when the property had a $6.9 million FMV. This property is the only property included in his brother’s gross estate an...

Q: Mario owns 2,000 shares of Nevada Corporation common stock at

Mario owns 2,000 shares of Nevada Corporation common stock at the beginning of the year. His basis for the stock is $38,880. During the year, Nevada declares and pays a stock dividend. After the divid...