Questions from Federal Taxation

Q: Silver Creek Ranch LLC is a small, family-owned cattle

Silver Creek Ranch LLC is a small, family-owned cattle ranch that began operations in the current year. The ranch grows hay that will be fed to its purebred cattle. It will take approximately three ye...

Q: In 2018, Gail changed from the lower of cost or market

In 2018, Gail changed from the lower of cost or market FIFO method to the LIFO inventory method. The ending inventory for 2017 was computed as follows: Item C was damaged goods, and the replacement...

Q: At the end of 2019, Magenta Manufacturing Company discovered that construction

At the end of 2019, Magenta Manufacturing Company discovered that construction cost had been capitalized as a cost of the factory building in 2014 when it should have been treated as a cost of product...

Q: Amber Company has used the dollar-value LIFO technique for the

Amber Company has used the dollar-value LIFO technique for the past three years. The company has only one inventory pool. Its beginning inventory for the current year was computed as follows: a. The...

Q: Your client, Bob Young, is negotiating a sale of investment

Your client, Bob Young, is negotiating a sale of investment real estate for $12 million. Bob believes that the buyer would pay cash of $8 million and a note for $4 million or $3 million cash and a not...

Q: Juan owned 200 shares of Circle Corporation stock (adjusted basis of

Juan owned 200 shares of Circle Corporation stock (adjusted basis of $30,000). He sold 100 shares for $12,000. Twenty days later he purchased 100 shares of the same stock for $8,500. What is Juan's re...

Q: Ven Company is a retailer. 1n 2018, its before-

Ven Company is a retailer. 1n 2018, its before-tax net income for financial reporting purposes was $600,000. This included a $150,000 gain from the sale of land held for several years as a possible pl...

Q: Blonde Corporation has a calendar year retirement plan covering its participants.

Blonde Corporation has a calendar year retirement plan covering its participants. William, age 21, is hired on January 31, 2017, and he meets the service requirement over the next 12 months (completes...

Q: Ben is a 4% owner of a title company. In

Ben is a 4% owner of a title company. In the following situations, is he a highly compensated employee? Why or why not? a. Ben receives a total salary of $110,000 and is a member of the top-paid group...

Q: Sparrow, Inc., uses a three- to seven-year

Sparrow, Inc., uses a three- to seven-year graded vesting approach in its retirement plan. Calcu1ate the non forfeitable percentage for each of the following participants based upon the years of servi...