Questions from Federal Taxation


Q: Most sales of securities at a loss result in capital losses.

Most sales of securities at a loss result in capital losses. Under what circumstances would a loss on the sale of a security be treated as an ordinary loss? Explain the rationale for allowing this tr...

See Answer

Q: What is the purpose of the related party rules as they apply

What is the purpose of the related party rules as they apply to sales of property?

See Answer

Q: Capital gains of individuals are taxed at a 15% rate (

Capital gains of individuals are taxed at a 15% rate (0% for 10% and 15% marginal tax rate taxpayers, 20% for 39.6% marginal tax rate taxpayers). Capital gains of corporations are taxed at the corpor...

See Answer

Q: Losses incurred on the sale of business assets are generally deductible in

Losses incurred on the sale of business assets are generally deductible in full in the year the loss is realized. Describe a situation in which a realized loss on the sale of a business asset is not...

See Answer

Q: Classify the following items as ordinary income, a gain, or

Classify the following items as ordinary income, a gain, or an exclusion: a. The gross revenues of $160,000 and deductible expenses of $65,000 of an individual's consulting business b. Interest receiv...

See Answer

Q: What is a wash sale? How is the treatment of a

What is a wash sale? How is the treatment of a wash sale different from the treatment of other sales of securities?

See Answer

Q: How are the rules for deducting personal casualty and theft losses different

How are the rules for deducting personal casualty and theft losses different from the rules for business casualty and theft losses? Explain the difference in treatments and the rationale for the diff...

See Answer

Q: How are deductions and losses different? How are they similar?

How are deductions and losses different? How are they similar? Explain.

See Answer

Q: Discuss the basic differences between annual losses and transaction losses.

Discuss the basic differences between annual losses and transaction losses.

See Answer

Q: What is the purpose of the passive loss rules?

What is the purpose of the passive loss rules?

See Answer