Questions from Federal Taxation

Q: On July 2, 2015, Black Corporation sold 1,000

On July 2, 2015, Black Corporation sold 1,000 of its common shares (worth $14 per share) to Earl, an employee, for $5 per share. The sale was subject to Earl's agreement to resell the shares to the co...

Q: Rosa exercises ISOs for 100 shares of Copper Corporation common stock at

Rosa exercises ISOs for 100 shares of Copper Corporation common stock at the option price of $100 per share on May 21, 2018, when the fair market value is $120 per share. She sells the 100 shares of c...

Q: On November 19, 2016, Rex is granted a nonqualified stock

On November 19, 2016, Rex is granted a nonqualified stock option to purchase 100 shares of Tan Company. On that date, the stock is selling for $8 per share, and the option price is $9 per share. Rex e...

Q: Sara Reid, age 35, is the owner of a small

Sara Reid, age 35, is the owner of a small business. She is trying to decide whether to go with a 401(k) plan or a simplified employee pension plan. She is not interested in a SIMPLE 401(k) plan. Her...

Q: Lou’s employer provides a qualified cafeteria plan under which he can choose

Lou’s employer provides a qualified cafeteria plan under which he can choose cash of $9,000 or health and accident insurance premiums worth approximately $7,000. Assuming that Lou is in the 35% tax br...

Q: Zariat has the retirement assets listed below. She plans to retire

Zariat has the retirement assets listed below. She plans to retire and start withdrawing amounts on which to live. Rank the accounts in the order from which she should make withdrawals so that tax def...

Q: Using the legend provided below, classify each statement under 2018 tax

Using the legend provided below, classify each statement under 2018 tax law a. A foreign tax credit is available. b. The deduction of charitable contributions is subject to percentage limitation(s)....

Q: Garnet has the following capital asset transactions during 2018:

Garnet has the following capital asset transactions during 2018: Further, Garnet has an excess capital loss carryforward of $6,000 from 2017. a. What are the tax consequences of these transactions i...

Q: On June 5, 2018, Brown, Inc., a calendar

On June 5, 2018, Brown, Inc., a calendar year taxpayer, receives cash of $750,000 from the county upon condemnation of its warehouse building (adjusted basis of $500,000 and fair market value of $750,...

Q: Citron, a calendar year taxpayer, began business in January 2017

Citron, a calendar year taxpayer, began business in January 2017. It had a long-term capital gain of $5,000 in 2017 and a long-term capital loss of $10,000 in 2018. For both years, Citron had an opera...