Questions from Federal Taxation

Q: Ray acquired an activity several years ago, and in the current

Ray acquired an activity several years ago, and in the current year, it generates a loss of $50,000. Ray has AGI of $140,000 before considering the loss from the activity. If the activity is a bakery...

Q: Sue exchanges a sport-utility vehicle (adjusted basis of $

Sue exchanges a sport-utility vehicle (adjusted basis of $16,000; fair market value of $19,500) for cash of $2,000 and a pickup truck (fair market value of $17,500). Both vehicles are for business use...

Q: Several years ago Benny Jackson (125 Hill Street, Charleston,

Several years ago Benny Jackson (125 Hill Street, Charleston, WV 25311) acquired an apartment building that currently generates a loss of $60,000. Benny’s AGI is $130,000 before considering the loss....

Q: This year Maria works 1,200 hours as a computer consultant

This year Maria works 1,200 hours as a computer consultant, 320 hours in a real estate development business, and 400 hours in real estate rental activities. Juan, her husband, works 250 hours in the r...

Q: Tim and Sarah Lawrence are married and file a joint return.

Tim and Sarah Lawrence are married and file a joint return. Tim’s Social Security number is 123-45-6789, and Sarah’s Social Security number is 111-11-1112. They reside at 100 Olive Lane, Covington, LA...

Q: Bonnie and Jake (ages 35 and 36, respectively) are

Bonnie and Jake (ages 35 and 36, respectively) are married with no dependents and live in Montana (not a community property state). Because Jake has large medical expenses, they seek your advice about...

Q: Santiago and Amy are married and file a joint tax return,

Santiago and Amy are married and file a joint tax return, claiming as dependents their three children, ages 12, 14, and 18. Their AGI is $140,000. Determine the amount of the couple’s child tax credit...

Q: Mary and Charles have owned a beach cottage on the New Jersey

Mary and Charles have owned a beach cottage on the New Jersey shore for several years and have always used it as a family retreat. When they acquired the property, they had no intentions of renting it...

Q: During the current year, Gene, a CPA, performs services

During the current year, Gene, a CPA, performs services as follows: 1,800 hours in his tax practice and 50 hours in an apartment leasing operation in which he has a 15% interest. Because of his oversi...

Q: Ida, who has AGI of $80,000 before considering

Ida, who has AGI of $80,000 before considering rental activities, is active in three separate real estate rental activities and is in the 28% tax bracket. She has $12,000 of losses from Activity A, $1...