Questions from Federal Taxation

Q: Noah, who has $62,000 of AGI before considering

Noah, who has $62,000 of AGI before considering rental activities, has $70,000 of losses from a real estate rental activity in which he actively participates. He also actively participates in another...

Q: Margo receives a gift of real estate with an adjusted basis of

Margo receives a gift of real estate with an adjusted basis of $175,000 and a fair market value of $100,000. The donor paid gift tax of $15,000 on the transfer. If Margo later sells the property for $...

Q: What is the control requirement of § 351? Describe the effect

What is the control requirement of § 351? Describe the effect of the following in satisfying this requirement: a. A shareholder renders only services to the corporation for stock. b. A shareholder ren...

Q: Paul Chaing (4522 Fargo Street, Geneva, IL 60134)

Paul Chaing (4522 Fargo Street, Geneva, IL 60134) acquires a qualifying historic structure for $350,000 (excluding the cost of the land) and plans to substantially rehabilitate the structure. He is pl...

Q: Nancy and her daughter, Kathleen, have been working together in

Nancy and her daughter, Kathleen, have been working together in a cattery called “The Perfect Cat.” Nancy formed the business several years ago as a sole proprietorship, and it has been very successfu...

Q: Four friends plan to form a corporation for purposes of constructing a

Four friends plan to form a corporation for purposes of constructing a shopping center. Charlie will be contributing the land for the project and wants more security than shareholder status provides....

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

Copper 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 recog...

Q: How does the transfer of mortgaged property to a controlled corporation affect

How does the transfer of mortgaged property to a controlled corporation affect the transferor-shareholder’s basis in stock received? Assume that no gain is recognized on the transfer.

Q: In a § 351 transfer, Grebe Corporation receives property in exchange

In a § 351 transfer, Grebe Corporation receives property in exchange for stock. Will Grebe’s holding period for the property be the same as the shareholder’s holding period for the stock? Explain.

Q: Katie, a single taxpayer, invested $75,000 in

Katie, a single taxpayer, invested $75,000 in the stock of Penguin Corporation, which recently declared bankruptcy. Although distressed over the loss of her investment, Katie is relieved that she can...