Questions from Federal Taxation

Q: In 2019, Emma purchased an automobile, which she uses for

In 2019, Emma purchased an automobile, which she uses for both business and personal purposes. Although Emma does not keep records as to operating expenses (e.g., gas, oil, and repairs), she can prove...

Q: In late 2021, the Polks come to you for tax advice

In late 2021, the Polks come to you for tax advice. They are considering selling some stock investments for a loss and making a contribution to a traditional IRA. In reviewing their situation, you not...

Q: Lime Finance Company requires its customers to purchase a credit life insurance

Lime Finance Company requires its customers to purchase a credit life insurance policy associated with the loans it makes. Lime is the beneficiary of the policy to the extent of the remaining balance...

Q: In 2021, David is age 78, is a widower,

In 2021, David is age 78, is a widower, and is being claimed as a dependent by his son. How does this situation affect the following? a. David’s own individual filing requirement. b. The standard dedu...

Q: On May 9, 2019, Calvin acquired 250 shares of stock

On May 9, 2019, Calvin acquired 250 shares of stock in Hobbes Corporation, a new startup company, for $68,750. Calvin acquired the stock directly from Hobbes, and it is classified as § 1244 stock (at...

Q: Noelle’s diamond ring was stolen in November 2017. She originally paid

Noelle’s diamond ring was stolen in November 2017. She originally paid $8,000 for the ring, but it was worth considerably more at the time of the theft. Noelle filed an insurance claim for the stolen...

Q: Belinda was involved in a boating accident in 2021. Her speedboat

Belinda was involved in a boating accident in 2021. Her speedboat, which was used only for personal use and had a fair market value of $28,000 and an adjusted basis of $14,000, was completely destroye...

Q: Sandstorm Corporation decides to develop a new line of paints. The

Sandstorm Corporation decides to develop a new line of paints. The project begins in 2021. Sandstorm incurs the following expenses in 2021 in connection with the project: Salaries ……………………………………………………...

Q: Sally Andrews calls you on the phone. She says that she

Sally Andrews calls you on the phone. She says that she has found a 2015 letter ruling that agrees with a position she wants to take on her tax return. She asks you about the precedential value of a l...

Q: Valeria and Trey are married and file a joint tax return.

Valeria and Trey are married and file a joint tax return. For 2021, they have $4,800 of nonbusiness capital gains, $2,300 of nonbusiness capital losses, $500 of interest income, and no itemized deduct...