Questions from Federal Taxation

Q: Dagwood has come to you with a pressing problem. In November

Dagwood has come to you with a pressing problem. In November 2006, he purchased an office building that he has rented out to various businesses. On May 2 of the current year, a fire swept through th...

Q: Opal's neighbor, Jillian, persuades her to invest in Schaake Corporation

Opal's neighbor, Jillian, persuades her to invest in Schaake Corporation, a new venture, on March 4, 2016. Opal pays $15,000 for 3,000 shares of common stock. On February 6, 2017, Schaake Corporatio...

Q: Fred's Foam Foundations (FFF) is a sole proprietorship that Fred

Fred's Foam Foundations (FFF) is a sole proprietorship that Fred started in 2012. Before the current year, FFF had not disposed of any property it owned. During the current year, FFF has the followi...

Q: Refer to the facts in problem 58. In the following year

Refer to the facts in problem 58. In the following year, FFF has these gains and losses: Casualty gain on building………………$ 5,000 Section 1231 gains…………………………$ 3,000 Section 1231 losses……………………….....

Q: In 2017, Sondra Corporation recognizes $18,000 in Section

In 2017, Sondra Corporation recognizes $18,000 in Section 1231 gains and $10,000 in Section 1231 losses. In 2012, Sondra reported $12,000 in Section 1231 losses and no Section 1231 gains. No other S...

Q: Dawn started her own rock band on January 2, 2015.

Dawn started her own rock band on January 2, 2015. She acquired all her equipment on January 2, 2015, and did not dispose of any of it before 2017. On April 15, 2017, the band’s amplifier, speakers,...

Q: Rhinelander Corporation has the following net Section 1231 gains and losses for

Rhinelander Corporation has the following net Section 1231 gains and losses for 2012 through 2016: 2012……………………………………$ 8,000 2013………………………………………(6,000) 2014……………………………………..(13,000) 2015……………………………...

Q: The Gladys Corporation buys equipment (7-year MACRS property)

The Gladys Corporation buys equipment (7-year MACRS property) costing $658,000 on May 12, 2017. In 2020, new and improved models of the equipment make it obsolete, and Gladys sells the old equipment...

Q: Why is a distinction made between long-term capital gain (

Why is a distinction made between long-term capital gain (loss) property and short-term capital gain (loss) property?

Q: Avalon Inc., buys equipment costing $150,000 in 2014

Avalon Inc., buys equipment costing $150,000 in 2014 and sells it in 2017. Avalon deducts $94,000 in depreciation on the equipment before the sale. What is the character of the gain or loss on the s...