Questions from Federal Taxation

Q: Calculate the basis for gain and basis for loss and the taxable

Calculate the basis for gain and basis for loss and the taxable gain or deductible loss for the following gifts which are received and sold in the current year:

Q: For his birthday, Moose gives his son, Babe, a

For his birthday, Moose gives his son, Babe, a valuable basketball card. Moose paid $100 for the card 12 years earlier. On Babe's birthday, the card is valued in a basketball card guidebook at $90....

Q: Stockton pays $10,000 for 1,000 shares of

Stockton pays $10,000 for 1,000 shares of Megacron, Inc., common stock on the day his niece Chama is born. Stockton's plan is to give the stock to Chama when she is ready to go to college. Eighteen...

Q: Quapaw Construction Company enters into an agreement with Paine County to resurface

Quapaw Construction Company enters into an agreement with Paine County to resurface 30 miles of highway. The contract is for $600,000. Quapaw estimates its total cost of the project to be $500,000....

Q: Florence's daughter, Eunice, needs $5,000 to start

Florence's daughter, Eunice, needs $5,000 to start a business. Florence agrees to give her the money but will have to sell some securities to raise that much cash. Florence has 1,200 shares of Tom C...

Q: The controller of Newform Oil Company has come to you for advice

The controller of Newform Oil Company has come to you for advice. Newform recently cleared a forested area and began drilling an oil well on the site. The well is a gusher, and Newform's geologists e...

Q: Mikel's daughter, Liudmila, is planning to go to law school

Mikel's daughter, Liudmila, is planning to go to law school in the fall. Mikel has promised her that he will pay her tuition, fees, and book costs. Mikel has 1,000 shares of Konrad Corporation stock...

Q: Alex begins using his automobile for business purposes in his new job

Alex begins using his automobile for business purposes in his new job. The automobile cost $25,000 and has a fair market value of $9,000 on the date of conversion to business use. a. What is Alex's i...

Q: Refer to problem 53. Alex uses the automobile for 3 years

Refer to problem 53. Alex uses the automobile for 3 years and then sells it. During this period, he properly deducts a total of $3,600 in depreciation. What is Alex's gain or loss on the automobile...

Q: Barbara wanted to go into the long-distance trucking business.

Barbara wanted to go into the long-distance trucking business. She bought a used tractor and trailer for $102,000. However, the trailer wasn't suitable for Barbara's needs, so she sold it for $24,00...