Questions from Federal Taxation

Q: Jane is the sole shareholder of Buttons, Inc. Buttons has

Jane is the sole shareholder of Buttons, Inc. Buttons has accumulated earnings and profits (E & P) of $65,000 at the beginning of the current year. The current E & P is $35,000. Buttons pays out a pro...

Q: Swift Corporation agreed to redeem some of the shares of two of

Swift Corporation agreed to redeem some of the shares of two of its shareholders. It distributed land (basis $55,000 and fair n1arket value $120,000) to Sam in exchange for part of his stock. Sam's ba...

Q: Which of the following staten1ents is true regarding the taxation of Social

Which of the following staten1ents is true regarding the taxation of Social Security benefits? a. 85% is the maximum amount of taxable Social Security benefits. b. 500/o is the maximum amount of taxab...

Q: Bill and Jane Jones were divorced on January 1, 2018.

Bill and Jane Jones were divorced on January 1, 2018. They have no children. In accordance with the divorce decree, Bill transferred the title of their house over to Jane. The home had a fair market v...

Q: Jake pays the following amounts to his former spouse during the current

Jake pays the following amounts to his former spouse during the current year: What amount can Jake deduct as alimony for the current year? Assume the divorce occurred before 2019. a. $0 b. $12,000 c...

Q: Gray is a 50% partner in Fabco Partnership. Gray's tax

Gray is a 50% partner in Fabco Partnership. Gray's tax basis in Fabco on January 1, year 4, was $5,000. Fabco made no distributions to the partners during year 4 and recorded the following. What is...

Q: Nick, Chris, Stacey, and Mike are each 25%

Nick, Chris, Stacey, and Mike are each 25% partners in Liberty Partnership, a general partnership. During the current year, the partnership had revenues of $300,000 and non separately allocated busine...

Q: Duffy Associates is a partnership engaged in real estate developn1ent. Olinto

Duffy Associates is a partnership engaged in real estate developn1ent. Olinto, a civil engineer, billed Duffy $40,000 in the current year for consulting services rendered. In full settlen1ent of this...

Q: The Turnaround LLC was formed several years ago. It incurred losses

The Turnaround LLC was formed several years ago. It incurred losses for several years, reducing many of its members' bases in their interests to zero. However, the business recently obtained some new...

Q: Crane is a partner in the Cardinal Partnership. A dispute arose

Crane is a partner in the Cardinal Partnership. A dispute arose with the partnership regarding Crane's share of current earnings. The partnership contends that the amount is $75,000, while Crane belie...