Questions from Federal Taxation

Q: Samantha an accrual basis taxpayer, subscribe to a service that updates

Samantha an accrual basis taxpayer, subscribe to a service that updates a database used in her business. In December 2018, Samantha paid the $120,000 subscription for the period January 2018 through D...

Q: On June 1, 2016, Father sold land to Son for

On June 1, 2016, Father sold land to Son for $300,000. Father reported the gain by the installment method, with the gain to be spread over five years. In May 2018, Son received an offer of $400,000 fo...

Q: In December 2018, Carl Corporation sold land it held as an

In December 2018, Carl Corporation sold land it held as an investment. The Corporation received $50,000 in 2018 and a note payable (with adequate interest) for $150,000 to be paid in 2020. Carl Corpor...

Q: Nathan uses the percentage of completion method to report income from his

Nathan uses the percentage of completion method to report income from his real estate construction contracts. A contract was begun in 2018 and completed in 2019. In 2018, Nathan reported gross income...

Q: Which of the following statements regarding the self-employment tax is

Which of the following statements regarding the self-employment tax is true? a. Income and expenses from self-employment are reported on Schedule D (Form 1040). b. Self-employment income is subject to...

Q: Neal uses the percentage of completion method to report his gross income

Neal uses the percentage of completion method to report his gross income from long-term contracts that were to begin in 2018. In 2019, he completes a contract for more than the estimate of total costs...

Q: Largo Company is an engineering consu1ting business that uses the accrual method

Largo Company is an engineering consu1ting business that uses the accrual method of accounting for its services. Mango Company is a manufacturer of nuts and bo1ts that also uses the accrual method to...

Q: Amber Auto Parts adopted the dollar-va1ue LIFO inventory method.

Amber Auto Parts adopted the dollar-va1ue LIFO inventory method. The company has consistently used a retail price index when it should have used a producer's. As a resu1t, its LIFO layers have been co...

Q: Opal, 1nc., is about to make its first attempt to

Opal, 1nc., is about to make its first attempt to borrow from a local bank. The company uses LIFO for tax purposes, solely to defer taxes, and believes that income computed using the FIFO method would...

Q: Blue is a retailer that uses FIFO inventory method. Blue has

Blue is a retailer that uses FIFO inventory method. Blue has consistently taken its physical inventory at the end of the on the last day of its tax year December 31. This practice is very unpopular wi...