Questions from Federal Taxation

Q: Classify each of the following transactions as a deductible expense, a

Classify each of the following transactions as a deductible expense, a nondeductible expense, or a loss: a. Nira sells for $4,300 stock that cost $6,000. b. Chiro Medical, Inc., pays $2,200 for subscr...

Q: Which of the following are passive activities? a. Marvin

Which of the following are passive activities? a. Marvin is a limited partner in the Jayhawk Beach Club and owns a 20% interest in the partnership. The partnership's sole asset is a resort hotel. b....

Q: Sidney and Gertrude Pearson own 40% of Bearcave Bookstore, an

Sidney and Gertrude Pearson own 40% of Bearcave Bookstore, an S corporation. The remaining 60% is owned by their son Boris. Sidney and Gertrude do not participate in operating or managing the store...

Q: Aretha and Betina own a 10-unit apartment complex. Aretha

Aretha and Betina own a 10-unit apartment complex. Aretha owns a 60% interest in the apartment complex, and Betina has a 40% interest. Aretha is an investment banker and spends 120 hours helping to...

Q: Carlos is a 25% owner of CEBJ Builders, a company

Carlos is a 25% owner of CEBJ Builders, a company that specializes in residential construction. The other 75% of CEBJ is owned by his three brothers. During the year, Carlos spends 1,800 hours manag...

Q: Prizes and awards are generally taxable. Under what conditions is the

Prizes and awards are generally taxable. Under what conditions is the receipt of a prize or award not taxable?

Q: Julio and Rosetta are retired and receive $12,000 in

Julio and Rosetta are retired and receive $12,000 in Social Security benefits during the current year. They also receive $10,000 in interest and taxable pension payments of $30,000. Prepare a spread...

Q: Mort is the sole owner of rental real estate that produces a

Mort is the sole owner of rental real estate that produces a net loss of $18,000 in 2016 and $20,000 in 2017 and income of $6,000 in 2018. His adjusted gross income, before considering the rental pro...

Q: Katrina is the sole owner of rental real estate that produces a

Katrina is the sole owner of rental real estate that produces a net loss of $18,000 in 2016 and $22,000 in 2017 and income of $9,000 in 2018. Her adjusted gross income, before considering the rental...

Q: Ivan and Olga own a duplex. They collect the rents and

Ivan and Olga own a duplex. They collect the rents and make repairs to the property when necessary. That is, they are active participants in the rental activity. During the current year, the duplex...