Questions from Federal Taxation

Q: Barbara is going to purchase a car for $20,000

Barbara is going to purchase a car for $20,000. She has two financing options: She can finance the purchase through the dealer at 1 percent for 48 months, with monthly loan payments of $425, or she...

Q: In 2014, Patricia purchases a rental property as an investment at

In 2014, Patricia purchases a rental property as an investment at a cost of $60,000. From 2014 through 2017, she takes $7,000 in depreciation on the property. In 2017, Patricia sells the rental prop...

Q: Return to the facts of problem 30. Assume that Show Corporation

Return to the facts of problem 30. Assume that Show Corporation is organized as an S corporation. In its second year of operations, Show has an operating loss of $40,000 and pays out $20,000 in divi...

Q: Paula purchases a 40% interest in Dancer Enterprises for $52

Paula purchases a 40% interest in Dancer Enterprises for $52,000 on January 2, of the current year. Dancer is organized as a partnership and has an income of $50,000 in the current year. Dancer also...

Q: Troy owns 600 of the 1,000 outstanding shares of Oiler

Troy owns 600 of the 1,000 outstanding shares of Oiler Corporation. His adjusted basis in the Oiler stock at the beginning of the current year is $88,000. Oiler Corporation is organized as an S corp...

Q: Erin purchases 2 acres of land in 2017 by paying $4

Erin purchases 2 acres of land in 2017 by paying $4,000 in cash at closing and borrowing $40,000 to be repaid at $8,000 per year for the next 5 years with interest on the unpaid balance at 10%. In ad...

Q: Florian Corporation purchases a piece of land for investment purposes on April

Florian Corporation purchases a piece of land for investment purposes on April 1. Florian pays the seller $2,000 cash and agrees to pay the seller $3,000 per year for the next 5 years plus interest a...

Q: Alphonse purchases a store and a warehouse. The asking price includes

Alphonse purchases a store and a warehouse. The asking price includes $150,000 for the store, $50,000 for the warehouse, and $90,000 for the land. Alphonse agrees to this price even though he does n...

Q: On October 1, 2017, Mitzo Realty Partnership purchases a lot

On October 1, 2017, Mitzo Realty Partnership purchases a lot for future development for $60,000 from the Elm Trust. The trust's adjusted basis in the lot is $20,000. Real estate taxes attributable to...

Q: Fala is the sole shareholder of Campbell Inc. During the current

Fala is the sole shareholder of Campbell Inc. During the current year, Campbell sells Fala land that had a fair market value of $40,000 for $28,000. Campbell has paid $30,000 for the land. What are...