Questions from Federal Taxation

Q: Ella has $105,000 of losses from a real estate

Ella has $105,000 of losses from a real estate rental activity in which she actively participates. She has other rental income of $25,000 and other passive activity income of $32,000. Her AGI before c...

Q: At death, Francine owns an interest in a passive activity property

At death, Francine owns an interest in a passive activity property (adjusted basis of $160,000, suspended losses of $16,000, and fair market value of $170,000). What is deductible on Francine’s final...

Q: In the current year, Abe gives an interest in a passive

In the current year, Abe gives an interest in a passive activity to his daughter, Andrea. The value of the interest at the date of the gift is $25,000, and its adjusted basis to Abe is $13,000. During...

Q: Heather wants to invest $40,000 in a relatively safe

Heather wants to invest $40,000 in a relatively safe venture and has discovered two alternatives that would produce the following reportable ordinary income and loss over the next three years: She i...

Q: Logan and Johnathan exchange land, and the exchange qualifies as like

Logan and Johnathan exchange land, and the exchange qualifies as like kind under § 1031. Because Logan’s land (adjusted basis of $85,000) is worth $100,000 and Johnathan’s land has a fair market value...

Q: Jay sold three items of business equipment for a total of $

Jay sold three items of business equipment for a total of $300,000. None of the equipment was appraised to determine its value. Jay’s cost and adjusted basis for the assets are shown...

Q: Dorothy acquired a 100% interest in two passive activities: Activity

Dorothy acquired a 100% interest in two passive activities: Activity A in January 2012 and Activity B in 2013. Through 2015, Activity A was profitable, but it produced losses of $200,000 in 2016 and $...

Q: A number of years ago, Kay acquired an interest in a

A number of years ago, Kay acquired an interest in a partnership in which she is not a material participant. Kay’s basis in her partnership interest at the beginning of 2016 is $40,000. Kay’s share of...

Q: Tanya Fletcher owns undeveloped land (adjusted basis of $80,

Tanya Fletcher owns undeveloped land (adjusted basis of $80,000 and fair market value of $92,000) on the East Coast. On January 4, 2017, she exchanges it with Lisa Martin (an unrelated party) for unde...

Q: Emily has $100,000 that she wants to invest and

Emily has $100,000 that she wants to invest and is considering the following two options: • Option A: Investment in Redbird Mutual Fund, which is expected to produce interest income of $8,000 per year...