Questions from Federal Taxation

Q: Javier is retiring from the JKL Partnership. In January of the

Javier is retiring from the JKL Partnership. In January of the current year, he has a $100,000 basis in his partnership interest when he receives a $10,000 cash distribution. The partnership plans to...

Q: Tom is a 55% general partner in the RST Partnership.

Tom is a 55% general partner in the RST Partnership. Tom wants to retire, and the other two partners, Stacy and Rich, want to continue the partnership business. They agree that the partnership will li...

Q: Cara, Bob, and Steve want to begin a business on

Cara, Bob, and Steve want to begin a business on January 1, 2018. The individuals are considering three business forms—C corporation, partnership, and S corporation. • Cara has investment land with...

Q: RST business entity reported the following items during the current year:

RST business entity reported the following items during the current year: Dividends from 25%-owned domestic corporation…………………………$ 19,000 Municipal bond interest received…………………………………………………….18,000 C...

Q: Jeff and John organized Tampa Corporation 18 years ago and have each

Jeff and John organized Tampa Corporation 18 years ago and have each owned 50% of the corporation since its inception. In the current year, Tampa reports ordinary income/taxable income of $40,000. Ass...

Q: Review the completed C corporation, partnership, and S corporation tax

Review the completed C corporation, partnership, and S corporation tax returns presented in Appendix B. List three major tax reporting similarities and three major tax reporting differences in either...

Q: Julio, age 50, is a U.S. citizen

Julio, age 50, is a U.S. citizen who has a 28% marginal tax rate. He has operated the A&B Automotive Parts Company for a number of years as a C corporation. Last year, A&B reported $200,000 of pre-tax...

Q: Celia, age 30, is leaving a major systems development firm

Celia, age 30, is leaving a major systems development firm to establish her own firm. She will design computer-based systems for small- and medium sized businesses. Celia will invest $100,000 in the b...

Q: Lance and Rodney are contemplating starting a new business to manufacture computer

Lance and Rodney are contemplating starting a new business to manufacture computer software games. They expect to encounter losses in the initial years. Lance’s CPA has talked to them about using an S...

Q: Will the following events cause an S election to terminate?

Will the following events cause an S election to terminate? a. The S corporation earning 100% of its gross receipts in its first tax year from passive sources b. The S corporation issuing nonvoting s...