Questions from Federal Taxation

Q: On April 3, 2021, Terry purchased and placed in service

On April 3, 2021, Terry purchased and placed in service a building that cost $2,000,000. An appraisal determined that 25% of the total cost was attributed to the value of the land. The bottom floor of...

Q: On May 5, 2021, Christy purchased and placed in service

On May 5, 2021, Christy purchased and placed in service a hotel. The hotel cost $10,800,000, and the land cost $1,200,000 ($12,000,000 in total). Calculate Christy’s cost recovery deductions for 2021...

Q: Rex, age 55, is an officer of Blue Company,

Rex, age 55, is an officer of Blue Company, which provides him with the following nondiscriminatory fringe benefits in 2021: • Hospitalization insurance premiums for Rex and his dependents. The cost o...

Q: Janice acquired an apartment building on June 4, 2021, for

Janice acquired an apartment building on June 4, 2021, for $1,600,000. The value of the land is $300,000. Janice sold the apartment building on November 29, 2027. a. Determine Janice’s cost recovery d...

Q: Mio was transferred from New York to Germany. He lived and

Mio was transferred from New York to Germany. He lived and worked in Germany for 340 days in 2021. Mio’s salary for 2021 is $190,000. In your computation, round any division to four decimal places bef...

Q: During 2021, Stork Associates paid $60,000 for a

During 2021, Stork Associates paid $60,000 for a 20-seat skybox at Veterans Stadium for eight professional football games. Regular seats to these games range from $80 to $250 each. At one game, an emp...

Q: Brianna, a calendar year taxpayer, files her income tax return

Brianna, a calendar year taxpayer, files her income tax return for 2020 on February 3, 2021. Although she makes repeated inquiries, she does not receive her refund from the IRS until May 28, 2021. Is...

Q: Using the legend provided, classify each of the following tax sources

Using the legend provided, classify each of the following tax sources: a. Sixteenth Amendment to the U.S. Constitution. b. Tax treaty between the United States and India. c. Revenue Procedure. d. An...

Q: Rita files her income tax return 35 days after the due date

Rita files her income tax return 35 days after the due date of the return without obtaining an extension from the IRS. Along with the return, she remits a check for $40,000, which is the balance of th...

Q: For tax year 2019, the IRS assesses a deficiency against David

For tax year 2019, the IRS assesses a deficiency against David for $500,000. Disregarding the interest component, what is David’s penalty if the deficiency is attributable to: a. Negligence? b. Fraud?...