Questions from Federal Taxation

Q: During her vacation, Janita found a gold bar from a sunken

During her vacation, Janita found a gold bar from a sunken ship while she was scuba diving off Texas. Identify the tax issue(s) posed by the facts presented. Determine the possible tax consequences...

Q: Ghon and Li own a home on Lake Gibran. During a

Ghon and Li own a home on Lake Gibran. During a heavy rainstorm, the lake overflows and floods the basement, which is used as their family room. The entire contents of the basement (rug, furniture, st...

Q: Kevin is the sole proprietor of Murph's Golf Shop. During the

Kevin is the sole proprietor of Murph's Golf Shop. During the current year, a hurricane hits the beach near Kevin's shop. His business building, which has a basis of $60,000, is damaged. In additio...

Q: Marsha owns a two-family condominium in southern California that she

Marsha owns a two-family condominium in southern California that she paid $140,000 for in 2002. One unit has 2,400 square feet of space, and the other has 1,600 square feet. Marsha uses the 2,400-sq...

Q: Jamila is involved in an auto accident during the current year that

Jamila is involved in an auto accident during the current year that totally destroys her car. She purchased the car 2 years ago for $28,000. Jamila used the car in her business 75% of the time over...

Q: Andy sells the following assets during the year.

Andy sells the following assets during the year. Gain (Loss) Personal aut...

Q: Faith, who is single, sells the following assets during 2017

Faith, who is single, sells the following assets during 2017: • 20,000 shares of qualified small business stock at a loss of $62,000. Faith bought the stock in 2012. • 1,200 shares of Geelong Industri...

Q: The Graves Corporation was incorporated in 2016 and incurred a net operating

The Graves Corporation was incorporated in 2016 and incurred a net operating loss of $35,000. The company’s operating income in 2017 was $47,000. Because of a downturn in the local economy, the comp...

Q: Habiby, Inc., has the following income and expenses for 2015

Habiby, Inc., has the following income and expenses for 2015 through 2018. What is the amount of tax that Habiby should pay each year?

Q: Post Haste, incorporated in 2015, suffers a net operating loss

Post Haste, incorporated in 2015, suffers a net operating loss of $80,000 in 2017. Post Haste had a net operating loss of $30,000 in 2015 and taxable income of $65,000 in 2016. Allison, the financia...