Questions from Federal Taxation

Q: Which of the following interest-free loans are subject to the

Which of the following interest-free loans are subject to the imputed interest rules? a. Alamor Corporation loans Sandy, an employee, $8,000. The loan is to be repaid over 4 years. Sandy uses the pro...

Q: Based on the example in Exhibit 1--2, explain how

Based on the example in Exhibit 1--2, explain how inflation can have two effects that result in a hidden tax.

Q: Laura makes the following interest-free loans during the current year

Laura makes the following interest-free loans during the current year. Discuss the income tax implications of each loan for both Laura and the borrower. In all cases, the applicable federal interest...

Q: On January 1, Wilton loans Andy $90,000.

On January 1, Wilton loans Andy $90,000. The loan is to be repaid in 5 years with no interest charged. The applicable federal rate is 5%. Discuss the treatment of the loan for both Wilton and Andy...

Q: Determine whether the following taxpayers have gross income from the payment of

Determine whether the following taxpayers have gross income from the payment of their expenses: a. Julia's mother, Henrietta, is short of cash when it comes time to pay her property taxes. Julia pays...

Q: Evaluate the following statement: Whenever another person pays an expense for

Evaluate the following statement: Whenever another person pays an expense for you, you are in receipt of taxable income.

Q: Reggie works during the summer for Dan the Screenman. Dan pays

Reggie works during the summer for Dan the Screenman. Dan pays Reggie $4,300 in salary, saves Reggie $200 on free screens for Reggie’s father’s house, and agrees to pay Reggie’s fall college tuition...

Q: Aziza is the sole owner of Azi's Fast Pizza. During the

Aziza is the sole owner of Azi's Fast Pizza. During the current year, Azi's replaces its fleet of delivery vehicles. Aziza's son purchases one of the old vehicles for $500, its tax basis to Azi's....

Q: Determine whether the taxpayer has income that is subject to taxation in

Determine whether the taxpayer has income that is subject to taxation in each of the following situations: a. Capital Motor Company is going out of business. As a result, June is able to purchase a c...

Q: Pedro purchases 50 shares of Piper Company common stock on February 19

Pedro purchases 50 shares of Piper Company common stock on February 19, 2014, at a cost of $4,300. He sells the 50 shares on July 2, 2017, for $9,000. On March 14, 2017, Pedro purchases 100 shares o...