Questions from Federal Taxation

Q: Mike and Nancy are equal shareholders in MN Corporation, an S

Mike and Nancy are equal shareholders in MN Corporation, an S corporation. The corporation, Mike, and Nancy are calendar year taxpayers. The corporation has been an S corporation during its entire exi...

Q: Al and Ruth each own one-half the stock of Chemical

Al and Ruth each own one-half the stock of Chemical Corporation, an S corporation. During the current year (assume a non-leap year), Chemical earns $15,000 per month of ordinary income. On April 5, Ru...

Q: Toyland Corporation, an S corporation, uses the calendar year as

Toyland Corporation, an S corporation, uses the calendar year as its tax year. Bob, Alice, and Carter own 60, 30, and 10 shares, respectively, of the Toyland stock. Carter’s basis for his stock is $26...

Q: Redfern Corporation, a calendar year taxpayer, has been an S

Redfern Corporation, a calendar year taxpayer, has been an S corporation for several years. Rod and Kurt each own 50% of Redfern’s stock. On July 1 of the current year (assume a non-leap year), Redfer...

Q: Bright Corporation, an S corporation, has been 100% owned

Bright Corporation, an S corporation, has been 100% owned by Betty since its creation 12 years ago. The corporation has been profitable in recent years and, in the current year (assume a non-leap year...

Q: What are the advantages of a firm being formed as a limited

What are the advantages of a firm being formed as a limited liability company (LLC) instead of as a limited partnership?

Q: Monte and Allie each own 50% of Raider Corporation, an

Monte and Allie each own 50% of Raider Corporation, an S corporation. Both individuals actively participate in Raider’s business. On January 1, Monte and Allie have adjusted bases for their Raider sto...

Q: Assume the same facts as in Problem C:11-42

Assume the same facts as in Problem C:11-42. Assume further that Raider Corporation reports $75,000 of ordinary income, $20,000 of tax-exempt income, and a $25,000 long-term capital gain in the next y...

Q: Tom owns 100% of Hammer Corporation, an S corporation.

Tom owns 100% of Hammer Corporation, an S corporation. Tom has a $100,000 stock basis on January 1. Tom actively participates in Hammer’s business. Hammer’s operating results were not good in the curr...

Q: In the current year, Harold and Faye form Entity Company by

In the current year, Harold and Faye form Entity Company by each contributing $50,000 to the company in exchange for a 50% ownership interest. In addition, the company borrows $40,000 from First Bank....