Questions from Federal Taxation

Q: Tonya purchased land for investment purposes in 2014 for $21,

Tonya purchased land for investment purposes in 2014 for $21,000. In 2017, she sells the land for $36,000. The terms of the sale require the purchaser to pay Tonya $12,000 per year for three years w...

Q: Kuerten Manufacturers sue the Rafter Corporation for patent infringement. The court

Kuerten Manufacturers sue the Rafter Corporation for patent infringement. The court upholds Kuerten’s claim and requires Rafter to pay Kuerten $2,000,000 in damages. However, the court does not allo...

Q: Can Joe Corporation deduct the following expenses related to its business?

Can Joe Corporation deduct the following expenses related to its business? a. Legal fee paid ($40,000) to acquire a competing chain of stores b. Legal fee paid ($12,000) to determine whether it should...

Q: During the current year, Carson pays $1,500 in

During the current year, Carson pays $1,500 in child support and $2,000 in alimony to his ex-wife. What is Carson's allowable deduction, and how should it be deducted on his tax return?

Q: In 2015, Samantha loaned her friend Lo Ping $15,

In 2015, Samantha loaned her friend Lo Ping $15,000. The loan required Lo Ping to pay interest at 8% per year and to pay back the $15,000 loan principal on July 31, 2017. Lo Ping used the loan to st...

Q: Harold and Maude are both 55 years of age and have two

Harold and Maude are both 55 years of age and have two married children. Harold is an engineer and is an active participant in his company’s qualified pension plan. Maude is a retired school teacher...

Q: Calculate Calzone Trucking's 2017 taxable income. Indicate the amount and the

Calculate Calzone Trucking's 2017 taxable income. Indicate the amount and the effect of any carryforwards or carrybacks on Calzone Trucking's current, past, or future income.

Q: Exeter Savings and Loan is located in a two-story building

Exeter Savings and Loan is located in a two-story building in downtown Exeter. The building has a basement in which the heating system for the bank is located. The bank also uses the basement to sto...

Q: Jordan and her brother Jason agree to purchase a hardware store from

Jordan and her brother Jason agree to purchase a hardware store from a local bank, which acquired it through foreclosure. Because the bank wants to sell the business, Jordan and Jason can to buy it f...

Q: The enactment of the passive loss rules has generally diminished the attractiveness

The enactment of the passive loss rules has generally diminished the attractiveness of tax shelters as investments. However, rental real estate continues to provide a viable tax shelter for certain t...