Questions from Federal Taxation

Q: The IRS has established procedures to simplify taxpayers' choice of entity for

The IRS has established procedures to simplify taxpayers' choice of entity for tax purposes. The procedures are referred to as the "check-the-box" regulations. Use the Internet to find articles or...

Q: Recently, there has been a lot of discussion about what is

Recently, there has been a lot of discussion about what is commonly referred to as “corporate tax shelters” as a means of corporations' avoiding paying income tax. Discussions in Congress may lead to...

Q: Ruiz and his two brothers founded a social club called the Last

Ruiz and his two brothers founded a social club called the Last Snake Inn in 1996. They want to take advantage of a new state law that lets them serve beer, liquor, and wine to their patrons on Sunday...

Q: Shirley and Roseann form Rosa Corporation with each contributing assets and cash

Shirley and Roseann form Rosa Corporation with each contributing assets and cash in exchange for all of the corporation's stock. Shirley and Roseann each own 50% of the stock immediately after the ex...

Q: A former clergyman with a degree in counseling decides to go into

A former clergyman with a degree in counseling decides to go into business for himself. He contracts with four large corporations to provide alcohol, drug, and psychological analysis for their employ...

Q: In determining the amount of a realized gain or loss to be

In determining the amount of a realized gain or loss to be recognized in the current year, certain types of gains and losses are deferred while others are disallowed. What is the difference between d...

Q: Raquel is an employee of Jones Company and owns a 30%

Raquel is an employee of Jones Company and owns a 30% interest in the company. Her salary is $44,000. She also receives a $10,000 cash distribution from Jones. During the current year, Jones's ope...

Q: Rolf owns 20% of Chaminade Corporation. During the current year

Rolf owns 20% of Chaminade Corporation. During the current year, Chaminade reports operating income of $240,000 and pays $60,000 in cash dividends. Identify the tax issue(s) posed by the facts presen...

Q: Artis owns 40% of the Rhode Island Chile Parlor (RICP

Artis owns 40% of the Rhode Island Chile Parlor (RICP). During the current year, Rhode Island gives Artis fringe benefits worth $4,000 in addition to his $30,000 salary. RICP’s net taxable income be...

Q: Enterprise Business Systems, pays the $5,000 health and

Enterprise Business Systems, pays the $5,000 health and accident insurance policy of its owner Gena. The business's net operating income for the year is $60,000 before considering Gena's benefit. Det...