Questions from Federal Taxation

Q: On June 5, 2017, Brown, Inc., a calendar

On June 5, 2017, Brown, Inc., a calendar year taxpayer, receives cash of $750,000 from the county upon condemnation of its warehouse building (adjusted basis of $500,000 and fair market value of $750,...

Q: On February 24, 2017, Allison’s building, with an adjusted

On February 24, 2017, Allison’s building, with an adjusted basis of $1.3 million (and used in her trade or business), is destroyed by fire. On March 31, 2017, she receives an insurance reimbursement o...

Q: Gary, who is single, sells his principal residence (owned

Gary, who is single, sells his principal residence (owned and occupied by him for seven years) in November 2017 for a realized gain of $148,000. He had purchased a more expensive new residence eight m...

Q: On August 31, 2016, Harvey and Margaret, who file

On August 31, 2016, Harvey and Margaret, who file a joint return and live in Charleston, South Carolina, sell their personal residence, which they have owned and lived in for 10 years. The realized ga...

Q: Sally owns real property for which the annual property taxes are $

Sally owns real property for which the annual property taxes are $9,000. She sells the property to Kate on March 9, 2017, for $550,000. Kate pays the real property taxes for the entire year on October...

Q: On July 1, 2017, Katrina purchased tax-exempt bonds

On July 1, 2017, Katrina purchased tax-exempt bonds (face value of $75,000) for $82,000. The bonds mature in five years, and the annual interest rate is 6%. The market rate of interest is 2%. a. How m...

Q: During the year, Eugene had the four property transactions summarized below

During the year, Eugene had the four property transactions summarized below. Eugene is a collector of antique glassware and occasionally sells a piece to get funds to buy another. What are the amount...

Q: Pierre, a cash basis, unmarried taxpayer, had $1

Pierre, a cash basis, unmarried taxpayer, had $1,400 of state income tax withheld during 2017. Also in 2017, Pierre paid $455 that was due when he filed his 2016 state income tax return and made estim...

Q: Luciana, a nonshareholder, purchases a condominium from her employer for

Luciana, a nonshareholder, purchases a condominium from her employer for $85,000. The fair market value of the condominium is $120,000. What is Luciana’s basis in the condominium and the amount of any...

Q: Mike, an attorney, earns $200,000 from his

Mike, an attorney, earns $200,000 from his law practice and receives $45,000 in dividends and interest during the year. In addition, he incurs a loss of $50,000 from an investment in a passive activit...