Questions from Federal Taxation

Q: Ann and Bill were on the list of a local adoption agency

Ann and Bill were on the list of a local adoption agency for several years seeking to adopt a child. Finally, in 2016, good news comes their way and an adoption seems imminent. They pay qualified adop...

Q: Zorn conducted his professional practice through Zorn, Inc. The corporation

Zorn conducted his professional practice through Zorn, Inc. The corporation uses a fiscal year ending September 30 even though the business purpose test for a fiscal year cannot be satisfied. For the...

Q: Your client is a manufacturer. For several years, the company

Your client is a manufacturer. For several years, the company buried empty paint cans on its property. The paint was used in the production process. Recently, a state environmental agency informed the...

Q: In 2017, your client, Clear Corporation, changed from the

In 2017, your client, Clear Corporation, changed from the cash to the accrual method of accounting for its radio station. The company had a positive § 481 adjustment of $2.4 million as a result of the...

Q: Hakim’s rental building was not insured when it was destroyed by a

Hakim’s rental building was not insured when it was destroyed by a hurricane. His adjusted basis for the building was substantial, but was less than he had paid for the building in 2013. The building...

Q: Why did the AICPA object to former Congressman Dave Camp’s tax reform

Why did the AICPA object to former Congressman Dave Camp’s tax reform proposal introduced in February 2014 (later officially introduced as H.R. 1 of the 113rd Congress) regarding the use of the cash m...

Q: Your client is not permitted to deduct a year-end accrual

Your client is not permitted to deduct a year-end accrual for vacation pay earned but not paid. This result occurs because the tax law considers this to be deferred compensation that is ineligible for...

Q: Your client supplies water to a housing development. The company requires

Your client supplies water to a housing development. The company requires new customers to pay for the extension of the water lines to their homes. The water lines are the company’s property. The comp...

Q: Compute the charitable contribution deduction (ignoring the percentage limitation) for

Compute the charitable contribution deduction (ignoring the percentage limitation) for each of the following C corporations. a. Amber Corporation donated inventory of clothing (basis of $24,000, fair...

Q: Crane and Loon Corporations, two unrelated C corporations, have the

Crane and Loon Corporations, two unrelated C corporations, have the following transactions for the current year: a. Compute the dividends received deduction for Crane Corporation. b. Compute the div...