Questions from Federal Taxation

Q: Lulu Enterprises sells a building with an adjusted basis of $40

Lulu Enterprises sells a building with an adjusted basis of $40,000 for $85,000. Lulu paid $60,000 for the building five years ago. What is the treatment of the gain on the sale of the building if a...

Q: Lacy Corporation sells equipment and a building during the current year.

Lacy Corporation sells equipment and a building during the current year. The equipment, which cost $14,000 in 2014, is sold for $9,000. The equipment was expensed using the Section 179 election in 2...

Q: Assume the same facts as in problem 35, except that Lacy

Assume the same facts as in problem 35, except that Lacy is an S corporation equally owned by Jorge and Gloria. How should Lacy report the gains on the sale of the equipment and the building? Data fr...

Q: Christoffe sells 1,000 shares of HoTech Corporation preferred stock for

Christoffe sells 1,000 shares of HoTech Corporation preferred stock for $37 per share on August 3 of the current year. Sales commissions total $300. The stock's price has been falling since after Ho...

Q: In 2016, Nuts & Seeds Inc., purchased a new “

In 2016, Nuts & Seeds Inc., purchased a new “high-tech” shelling machine from Soft-Core Corporation. Nuts & Seeds paid $1,000 in cash and gave Soft-Core a $29,000 note. The note is non-recourse and...

Q: The Baker Corporation has the following entries on its books for the

The Baker Corporation has the following entries on its books for the current tax year: Net income from operations…………………………………………………………$120,000 Dividends received (70% rules)……………………………………………………….14,...

Q: Fairplay Corporation has gross income of $150,000 and taxable

Fairplay Corporation has gross income of $150,000 and taxable income of $50,000. The company includes no special deductions in the calculation of its taxable income. While reviewing the tax return, Fa...

Q: The New Tech Corporation contributes some of its inventory of scientific equipment

The New Tech Corporation contributes some of its inventory of scientific equipment to the computer department of Great University during the current year. At the date of the contribution, the equipmen...

Q: Mel's Super Groceries, Inc., donates $70,000 worth

Mel's Super Groceries, Inc., donates $70,000 worth of canned food with a basis of $50,000 to St. Rebecca's Homeless Shelter, a qualified charitable organization. How much may Mel's deduct for the char...

Q: Tarhari Enterprises, Inc., donates $70,000 worth of

Tarhari Enterprises, Inc., donates $70,000 worth of computer equipment and related software to Northwest Gifford High School. The property's basis is $30,000. How much may Tarhari deduct for the cha...