Questions from Federal Taxation

Q: Angela, who is single, incurs circulation expenditures of $270

Angela, who is single, incurs circulation expenditures of $270,000 during 2018. She is deciding whether to deduct the entire $270,000 or to capitalize the expenses and deduct them over a three-year pe...

Q: Archie runs a small mineral exploration business (as a sole proprietorship

Archie runs a small mineral exploration business (as a sole proprietorship) In 2016, he purchased land (for $68,000) where he suspected a magnesium deposit was located. He incurred $18,000 of explorat...

Q: In 2018, Geoff incurred $900,000 of mine and

In 2018, Geoff incurred $900,000 of mine and exploration expenditures. He elects to deduct the expenditures as quickly as the tax law allows for regular income tax purposes. a. How will Geoff's treatm...

Q: Burt, the CFO of Amber, Inc., was granted incentive

Burt, the CFO of Amber, Inc., was granted incentive stock options in 2013. Burt exercised the stock options in February 2017 when the exercise price was $75,00o and the fair market value of the stock...

Q: In 2018, Liza exercised an incentive stock option that had been

In 2018, Liza exercised an incentive stock option that had been granted to her in 2015 by her employer, Weather Corporation. Liza acquired 100 shares of Weather stock for the option price of $190 per...

Q: Christopher regularly invests in internet company stocks, hoping to become wealthy

Christopher regularly invests in internet company stocks, hoping to become wealthy by making an early investment in the next high-tech phenomenon In 2012, Christopher purchased 3,000 shares of Flicks...

Q: Elijah is single. He holds a $12,000 AMT

Elijah is single. He holds a $12,000 AMT credit from 2017. In 2018, his regular tax liability is $28,000 and his tentative minimum tax is $24,000 Does Elijah owe AMT in 2018? How much (if any) of the...

Q: During the current year, Yoon earned $10,000 in

During the current year, Yoon earned $10,000 in interest on corporate bonds and incurred $13,000 of investment interest expense related to the bond holdings. Yoon also earned $5,000 interest on privat...

Q: Emily owns a coal mine (basis of $12,000

Emily owns a coal mine (basis of $12,000 at the beginning of the year) that qualifies for a 15% depletion rate. Gross income from the property was $140,000, and net income before the percentage deplet...

Q: Amos incurred and expensed intangible drilling costs (IDC) of $

Amos incurred and expensed intangible drilling costs (IDC) of $70,000 His net oil and gas income was $60,000. What is the amount of Amos's preference for IDC?