Questions from Federal Taxation

Q: A professional football player’s contract is sold at a gain after it

A professional football player’s contract is sold at a gain after it has been held for two years. What issues should the team consider in determining the nature of this gain?

Q: A retailer’s store is destroyed by a tornado but is insured for

A retailer’s store is destroyed by a tornado but is insured for its replacement cost. Consequently, the retailer has a $40,000 gain after receiving the insurance proceeds. The store is not rep1aced be...

Q: Thomas receives tangible personal property as an inheritance from a decedent who

Thomas receives tangible personal property as an inheritance from a decedent who died in 2018. The property was depreciated by the deceased, and Thomas will also depreciate it. At the date of the dece...

Q: The dividends received deduction (DRD) is a tax deduction that

The dividends received deduction (DRD) is a tax deduction that may be taken by which of the following? a. An individual b. An S corporation c. A partnership d. An C corporation

Q: Complete the following statements regarding speω1 recapture provisions. a.

Complete the following statements regarding speω1 recapture provisions. a. Corporations selling depreciable real property are required to recapture as ordinary income the of two amounts: (1) % of the...

Q: If there is a net loss from the sale of depreciable business

If there is a net loss from the sale of depreciable business property held long term, what is the character of the loss? How is it deducted (for or from AGI)?

Q: Bernice, a sole proprietor, sold two business asset during the

Bernice, a sole proprietor, sold two business asset during the year. As a result, she has an ordinary loss and a § 1231 gain. The loss asset was office furniture that was held for eight months, and th...

Q: An individual taxpayer had a net 1231 loss in 2018. Could

An individual taxpayer had a net 1231 loss in 2018. Could any of this loss be treated as a long-term capital loss? Why or why not?

Q: Steven established a sole proprietorship in 2012. He sold 1231 asset

Steven established a sole proprietorship in 2012. He sold 1231 asset at a loss in 2016 and 2017. He had only sold § 1231 assets at a gain before 2016. In 2018, he cou1d sell a § 1231 asset at a gain a...

Q: If depreciab1e equipment used in a business is sold at a recognized

If depreciab1e equipment used in a business is sold at a recognized gain on July 10, 2018, and it was purchased on August 21, 2017, does § 1245 depreciation recapture apply to the asset? Explain.