Questions from Federal Taxation


Q: George sold land to an unrelated party in 2016. His basis

George sold land to an unrelated party in 2016. His basis in the land was $45,000, and the selling price was $120,000—$30,000 payable at closing and $30,000 (plus 10% interest) due January 1, 2017, 20...

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Q: The Wren Construction Company reports its income by the completed contract method

The Wren Construction Company reports its income by the completed contract method. At the end of 2017, the company completed a contract to construct a building at a total cost of $800,000. The contrac...

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Q: Charlie sells his antique farm tractor collection at a loss. He

Charlie sells his antique farm tractor collection at a loss. He had acquired all of the tractors for his personal pleasure and sold all of them for less than he paid for them. What is the tax status o...

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Q: For calendar year 2017, Stuart and Pamela Gibson file a joint

For calendar year 2017, Stuart and Pamela Gibson file a joint return reflecting AGI of $350,000. Their itemized deductions Casualty loss after $100 floor (not covered by insurance)…………..$48,600 Home...

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Q: Rust Company is a real estate construction company with average annual gross

Rust Company is a real estate construction company with average annual gross receipts of $4 million. Rust uses the completed contract method, and the contracts require 18 months to complete. a. Which...

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Q: Joe was in an accident and required cosmetic surgery for injuries to

Joe was in an accident and required cosmetic surgery for injuries to his nose. He also had the doctor do additional surgery to reshape his chin, which had not been injured. Will the cosmetic surgery t...

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Q: Chee purchases Tan, Inc. bonds for $108,000

Chee purchases Tan, Inc. bonds for $108,000 on January 2, 2017. The face value of the bonds is $100,000; the maturity date is December 31, 2021; and the annual interest rate is 5%. Chee will amortize...

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Q: Same as Problem 32, except that Jimenez paid $2 million

Same as Problem 32, except that Jimenez paid $2 million in income taxes to other countries. Data from Problem 32 Jimenez Enterprises is incorporated in Arkansas. It generated a $5 million profit on i...

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Q: On March 31, 2015, Big Boats Company entered into a

On March 31, 2015, Big Boats Company entered into a contract with Vacations Unlimited to produce a state-of-the-art cruise ship, to be completed within three years. Big Boats estimated the total cost...

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Q: Ostrich Company makes gasoline storage tanks. Everything produced is under contract

Ostrich Company makes gasoline storage tanks. Everything produced is under contract (that is, the company does not produce until it gets a contract for a product). Ostrich makes three basic models. Ho...

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