Questions from Federal Taxation

Q: Several years ago, Lowell, who is single, acquired §

Several years ago, Lowell, who is single, acquired § 1244 stock in Blue Corporation at a cost of $60,000. He sells the Blue stock for $5,000 in the current year. Determine the amount and nature of Low...

Q: Marie and Ethan form Roundtree Corporation with the transfer of the following

Marie and Ethan form Roundtree Corporation with the transfer of the following. Marie performs personal services for the corporation with a fair market value of $80,000 in exchange for 400 shares of st...

Q: Grady exchanges qualified property, basis of $12,000 and

Grady exchanges qualified property, basis of $12,000 and fair market value of $18,000, for 60% of the stock of Eadie Corporation. The other 40% of the stock is owned by Pedro, who acquired it five yea...

Q: At a point when Robin Corporation has been in existence for six

At a point when Robin Corporation has been in existence for six years, shareholder Ted transfers real estate (adjusted basis of $20,000 and fair market value of $100,000) to the corporation for additi...

Q: Siena Industries (a sole proprietorship) sold three § 1231 assets

Siena Industries (a sole proprietorship) sold three § 1231 assets during 2017. Data on these property dispositions are as follows: a. Determine the amount and the character of the recogn...

Q: Rhonda has an adjusted basis and an at-risk amount of

Rhonda has an adjusted basis and an at-risk amount of $7,500 in a passive activity at the beginning of the year. She also has a suspended passive activity loss of $1,500 carried over from the prior ye...

Q: Discuss how each of the following affects the calculation of the basis

Discuss how each of the following affects the calculation of the basis of stock received by a shareholder in a § 351 transfer: a. The transfer of a liability to the corporation along with property. b....

Q: A corporation acquires property as a contribution to capital from a shareholder

A corporation acquires property as a contribution to capital from a shareholder and from a nonshareholder. Are the rules pertaining to the property’s basis the same? Explain.

Q: Donna donates stock in Chipper Corporation to the American Red Cross on

Donna donates stock in Chipper Corporation to the American Red Cross on September 10, 2017. She purchased the stock for $18,100 on December 28, 2016, and it had a fair market value of $27,000 when she...

Q: The Wilmoths plan to purchase a house but want to determine the

The Wilmoths plan to purchase a house but want to determine the after-tax cost of financing its purchase. Given their projected taxable income, the Wilmoths are in the 28% Federal income tax bracket a...