Questions from Federal Taxation

Q: Using the facts of Problem 28, determine the 2016 end-

Using the facts of Problem 28, determine the 2016 end-of-year balance in Prance’s deferred tax asset and deferred tax liability balance sheet accounts. Facts of Problem 28 Prance, Inc., earns pretax...

Q: Joel is the sole shareholder of Manatee Corporation, a C corporation

Joel is the sole shareholder of Manatee Corporation, a C corporation. Because Manatee’s sales have increased significantly over the last several years, Joel has determined that the corporation needs a...

Q: Buddy Morgan is a real estate agent for Coastal Estates, a

Buddy Morgan is a real estate agent for Coastal Estates, a residential real estate development. Because of his outstanding sales performance, Buddy is permitted to buy a lot for $300,000 that normally...

Q: In the current year, Juanita and Joseph form a two-

In the current year, Juanita and Joseph form a two-member LLC and do not file Form 8832 (Entity Classification Election). As a result, the LLC will be treated as a partnership for Federal tax purposes...

Q: In the current year, Jeanette, an individual in the 25

In the current year, Jeanette, an individual in the 25%marginal tax bracket, recognized a $20,000 long-term capital gain. Also in the current year, Parrot Corporation, a C corporation in the 25% margi...

Q: John (a sole proprietor) and Eagle Corporation (a C

John (a sole proprietor) and Eagle Corporation (a C corporation) each recognize a long-term capital gain of $10,000 and a short-term capital loss of$18,000 on the sale of capital assets. Neither taxpa...

Q: Harriet, who is single, is the owner of a sole

Harriet, who is single, is the owner of a sole proprietorship. Two years ago, Harriet developed a process for preserving doughnuts that gives the doughnuts a much longer shelf life. The process is not...

Q: Leon sells his interest in a passive activity for $100,

Leon sells his interest in a passive activity for $100,000. Determine the tax effect of the sale based on each of the following independent facts: a. Adjusted basis in this investment is $35,000. Loss...

Q: Paul and Karen Kent are married, and both are employed (

Paul and Karen Kent are married, and both are employed (Paul earned $44,000 and Karen earned $9,000 this year). Paul and Karen have two dependent children, Samuel and Joy, both under the age of 13. Pa...

Q: A taxpayer sells a warehouse for a recognized gain. Depreciation had

A taxpayer sells a warehouse for a recognized gain. Depreciation had been properly claimed on the property, based on the straight-line method over a 39-year recovery period. Will the same amount of de...