Questions from Federal Taxation

Q: Tim has state income taxes of $4,500 withheld from

Tim has state income taxes of $4,500 withheld from his salary during 2017. On his 2016 federal income tax return, Tim properly deducts the $4,500 as state taxes paid. Upon filing his 2016 state incom...

Q: Jamal Corporation is an accrual basis taxpayer. In 2016, Jamal

Jamal Corporation is an accrual basis taxpayer. In 2016, Jamal writes off a $1,000 account receivable from a customer who has died. In 2017, the former customer's estate sends Jamal a check for $600...

Q: Angela enrolls as a student at Local College during the current year

Angela enrolls as a student at Local College during the current year. Before she starts school, her parents lend Angela $80,000 with the stipulation that she will lend the entire $80,000 back to them...

Q: Only mortgage interest paid on valid debts is deductible. Because Angela's

Only mortgage interest paid on valid debts is deductible. Because Angela's parents loaned her the money with the stipulation that she would return it to them shortly thereafter, there is no economic...

Q: For each of the following tax treatments, determine the concept,

For each of the following tax treatments, determine the concept, construct, or doctrine that provides the rationale for the treatment: a. During the current year, Trafalger Corporation pays $475,000 i...

Q: Postum Partnership purchases a building in 2014 for $250,000

Postum Partnership purchases a building in 2014 for $250,000. It deducts $5,600 in depreciation on the building in 2014, $6,400 in 2015, $6,400 in 2016, and $3,200 in 2017. It sells the building in...

Q: Chelsea, who is single, purchases land for investment purposes in

Chelsea, who is single, purchases land for investment purposes in 2012 at a cost of $22,000. In 2017, she sells the land for $38,000. Chelsea's taxable income without considering the land sale is $1...

Q: Explain why the following statement is not necessarily true: "If

Explain why the following statement is not necessarily true: "If the IRS disagrees, I'll take my case all the way to the Supreme Court."

Q: George purchases stock in Dodo Corporation in 2013 at a cost of

George purchases stock in Dodo Corporation in 2013 at a cost of $50,000. In 2017, he sells the stock for $32,000. What is the effect of the sale of stock on George's taxable income? Assume that Geo...

Q: Determine whether the taxpayer in each of the following situations has realized

Determine whether the taxpayer in each of the following situations has realized income. Explain why there has or has not been a realization, and determine the amount of income to be reported. a. Alfr...