Questions from Federal Taxation

Q: Dino contributes to charity some tangible personal property that he had used

Dino contributes to charity some tangible personal property that he had used in his business and depreciated. At the date of the donation, the property has a fair market value greater than its adjuste...

Q: Pedro, who is a single taxpayer, had AGI of $

Pedro, who is a single taxpayer, had AGI of $328,000 for 2017. He incurred the following expenses during the year: Medical expenses before 10%-of-AGI Limitation…………………………………………………$12,000 State and lo...

Q: A law practice was incorporated on January 1, 2017, and

A law practice was incorporated on January 1, 2017, and expects to earn $25,000 per month before deducting the lawyer’s salary. The lawyer owns 100% of the stock. The corporation and the lawyer both u...

Q: Fred, a cash basis taxpayer, received a $15,

Fred, a cash basis taxpayer, received a $15,000 bonus from his employer in 2017. The bonus was based on the company’s profits for 2016. In 2018, the company discovered that its 2016 profits were compu...

Q: In December 2017, Nell, Inc., an accrual basis taxpayer

In December 2017, Nell, Inc., an accrual basis taxpayer, paid $12,000 for insurance premiums for her business for the 2018 calendar year. How much of the premiums can Nell, Inc., deduct in 2017?

Q: In 2016, the taxpayer became ineligible to use the cash method

In 2016, the taxpayer became ineligible to use the cash method of accounting. At the beginning of the year, accounts receivable totaled $240,000, accounts payable for merchandise totaled $80,000, and...

Q: Edgar uses the cash method to report the income from his software

Edgar uses the cash method to report the income from his software consulting business. A large publicly held corporation has offered to invest in Edgar’s business as a limited partner. What tax accoun...

Q: Samantha, an accrual basis taxpayer, subscribes to a service that

Samantha, an accrual basis taxpayer, subscribes to a service that updates a database used in her business. In December 2017, Samantha paid the $120,000 subscription for the period January 2017 through...

Q: Linda, who files as a single taxpayer, had AGI of

Linda, who files as a single taxpayer, had AGI of $280,000 for 2017. She incurred the following expenses and losses during the year: Medical expenses (before the 10%-of-AGI limitation)……………………………..$3...

Q: In December 2017, Carl Corporation sold land it held as an

In December 2017, Carl Corporation sold land it held as an investment. The corporation received $50,000 in 2017 and a note payable (with adequate interest) for $150,000 to be paid in 2019. Carl Corpor...