Questions from Federal Taxation

Q: Colleen, Rosemary and Suzanne are owners of a software development firm

Colleen, Rosemary and Suzanne are owners of a software development firm. Colleen owns 45% of the business, Rosemary 30%, and Suzanne 25%. The net operating income from the business is $220,000. Ass...

Q: Natalie operates her bookkeeping service as a corporation. She is the

Natalie operates her bookkeeping service as a corporation. She is the sole shareholder and is an employee functioning as the chief operating officer. The corporation employs several other individual...

Q: Billy Bob is employed by the Pony Ranch Corporation and owns 1

Billy Bob is employed by the Pony Ranch Corporation and owns 1% of the corporation’s stock. The corporation provides excludable meals and lodging for Billy Bob at a cost of $12,000 annually. a. Can t...

Q: Miko and Mona form M&M Beverages in the current year

Miko and Mona form M&M Beverages in the current year. Miko contributes $20,000 in cash and delivery trucks worth $70,000 for a 30% interest. Miko's basis in the delivery trucks is $80,000. Mona cont...

Q: John and Katerina form JK Enterprises in the current year. John

John and Katerina form JK Enterprises in the current year. John contributes $200,000 in cash for a 40% interest. Katerina contributes real estate valued at $480,000 and encumbered by a mortgage of $...

Q: Emmon and Darcy are equal owners of Golf Instruction Academy (GIF

Emmon and Darcy are equal owners of Golf Instruction Academy (GIF). The business has been profitable, and they would like to expand their operations. Tiger owns Power Golf. Emmon and Darcy will mak...

Q: Are brokerage commissions paid on the sale of stock a current period

Are brokerage commissions paid on the sale of stock a current period expense? Explain.

Q: Toby exchanges property worth $80,000 (basis of $

Toby exchanges property worth $80,000 (basis of $55,000) for a 20% interest in Landscape Developers. What are the tax effects of the exchange if Landscape is organized as a. A partnership b. A corpor...

Q: Return to the facts of problem 53. Assume that the property

Return to the facts of problem 53. Assume that the property Toby contributes is encumbered by a $20,000 mortgage that is assumed by Landscape Developers. How does this affect the tax results for eac...

Q: Myron, Al, and Jandra make the following transfers from their

Myron, Al, and Jandra make the following transfers from their sole proprietorships, to a newly formed business, each receiving a 1/3 ownership interest. In addition, the business borrows $60,000 from...