Questions from Federal Taxation

Q: In January 2021, Ezra purchased 2,000 shares of Gold

In January 2021, Ezra purchased 2,000 shares of Gold Utility Mutual Fund for $20,000. In June, Ezra received an additional 100 shares as a dividend, in lieu of receiving $1,000 in cash dividends. In D...

Q: Tonya, who lives in California, inherited a $100,

Tonya, who lives in California, inherited a $100,000 State of California bond in 2021. Her marginal Federal tax rate is 35%, she itemizes deductions on her Federal tax return, and her marginal state t...

Q: Starting in 2010 Chuck and Luane have been purchasing Series EE bonds

Starting in 2010 Chuck and Luane have been purchasing Series EE bonds in their name to use for the higher education of their daughter Susie, who currently is age 18. During the year, they cash in $12,...

Q: Sanjay receives a settlement letter from the IRS after his discussion with

Sanjay receives a settlement letter from the IRS after his discussion with an IRS appeals officer. He is not satisfied with the $101,000 settlement offer. Identify the relevant issues facing Sanjay if...

Q: How does the tax benefit rule apply in the following cases?

How does the tax benefit rule apply in the following cases? a. In 2019, the Orange Furniture Store, an accrual method sole proprietorship, sold furniture on credit for $1,000 to Sammy. The cost of the...

Q: Jaimee and Mike live in Austin, Texas. They married early

Jaimee and Mike live in Austin, Texas. They married early in January 2020. They had saved a significant amount of money for their wedding, but instead decided to elope. The couple used the money they...

Q: In 2007, Malik purchased an office building for $500,

In 2007, Malik purchased an office building for $500,000 to be used in his business. He sells the building in the current tax year. Explain whether his recognized gain or loss for regular tax purposes...

Q: Angela, who is single, incurs circulation expenditures of $270

Angela, who is single, incurs circulation expenditures of $270,000 during 2021. She is deciding whether to deduct the entire $270,000 or to capitalize the expenses and deduct them over a three-year pe...

Q: Nichole, who is single and uses the cash method of accounting

Nichole, who is single and uses the cash method of accounting, lives in a state that imposes an income tax. In April 2021, she files her state income tax return for 2020 and pays an additional $1,000...

Q: In March 2021, Helen Carlon acquired used equipment for her business

In March 2021, Helen Carlon acquired used equipment for her business at a cost of $300,000. The equipment is five-year property for regular tax depreciation purposes. a. If Helen depreciates the equip...