Questions from Federal Taxation

Q: Anwar owns vacant land that he purchased many years ago as an

Anwar owns vacant land that he purchased many years ago as an investment. After getting approval to subdivide it into 35 lots, he made minimal improvements and then sold the entire property to a real...

Q: Hubert purchases all of the rights in a patent from the inventor

Hubert purchases all of the rights in a patent from the inventor who developed the patented product. After holding the patent for two years, Hubert sells all of the rights in the patent for a substant...

Q: Blue Corporation and Fuchsia Corporation are engaged in a contract negotiation over

Blue Corporation and Fuchsia Corporation are engaged in a contract negotiation over the use of Blue’s trademarked name, DateSiteForSeniors. For a onetime payment of $45,000, Blue licensed Fuchsia to u...

Q: At the date of a short sale, Sylvia has held substantially

At the date of a short sale, Sylvia has held substantially identical securities for more than 12 months. What is the nature of any gain or loss from the close of her short sale?

Q: After netting all of her short-term and long-term

After netting all of her short-term and long-term capital gains and losses, Misty has a net short-term capital loss and a net long-term capital loss. Can she net these against each other? Why or why n...

Q: Melaney has had a bad year with her investments. She lent

Melaney has had a bad year with her investments. She lent a friend $8,000; the friend did not repay the loan when it was due and then declared bankruptcy. The loan is totally uncollectible. Melaney al...

Q: Steven established a sole proprietorship in 2012. He sold § 1231

Steven established a sole proprietorship in 2012. He sold § 1231 assets at a loss in 2015 and 2016. He had only sold § 1231 assets at a gain before 2015. In 2017, he could sell a § 1231 asset at a gai...

Q: Benny purchased $400,000 of Peach Corporation face value bonds

Benny purchased $400,000 of Peach Corporation face value bonds for $320,000 on November 13, 2016. The bonds had been issued with $80,000 of original issue discount because Peach was in financial diffi...

Q: Mike purchased four $100 tickets to a fund-raising dinner

Mike purchased four $100 tickets to a fund-raising dinner and dance sponsored by the public library, a qualified charitable organization. In its advertising for the event, the library indicated that t...

Q: Fred is an investor in vacant land. When he thinks he

Fred is an investor in vacant land. When he thinks he has identified property that would be a good investment, he approaches the landowner, pays the landowner for a “right of first refusal” to purchas...