Questions from Federal Taxation

Q: Anne sold her home for $290,000 in 2021.

Anne sold her home for $290,000 in 2021. Selling expenses were $17,400. She purchased it in 2015 for $200,000. During the period of ownership, Anne did the following. • Deducted $50,500 office-in-hom...

Q: Kareem bought a rental house in March 2016 for $300,

Kareem bought a rental house in March 2016 for $300,000, of which $50,000 is allocated to the land and $250,000 to the building. Early in 2018, he had a tennis court built in the backyard at a cost of...

Q: Nissa owns a building (adjusted basis of $600,000

Nissa owns a building (adjusted basis of $600,000 on January 1, 2021) that she rents to Len, who operates a restaurant in the building. The city closed the restaurant for three months during 2021 beca...

Q: Liam owns a personal use boat that has a fair market value

Liam owns a personal use boat that has a fair market value of $35,000 and an adjusted basis of $45,000. Liam’s AGI is $100,000. Calculate the realized and recognized gain or loss if: a. Liam sells the...

Q: Zoe purchases Tan, Inc. bonds for $108,000

Zoe purchases Tan, Inc. bonds for $108,000 on January 2, 2021. The face value of the bonds is $100,000; the maturity date is December 31, 2025; and the annual interest rate is 5%. Zoe will amortize th...

Q: Brent Morgan is a real estate agent for Coastal Estates, a

Brent Morgan is a real estate agent for Coastal Estates, a residential real estate development. Because of his outstanding sales performance, Brent is permitted to buy a lot for $300,000 that normally...

Q: Karen Samuels (Social Security number 123-45-6789)

Karen Samuels (Social Security number 123-45-6789) makes the following purchases and sales of stock. Assuming that Karen is unable to identify the specific lots that are sold with the original purchas...

Q: Mahan purchases 1,000 shares of Bluebird Corporation stock on October

Mahan purchases 1,000 shares of Bluebird Corporation stock on October 3, 2021, for $300,000. On December 12, 2021, Mahan purchases an additional 750 shares of Bluebird stock for $210,000. According to...

Q: Rod Clooney purchases Kayla Mitchell’s sole proprietorship for $990,000

Rod Clooney purchases Kayla Mitchell’s sole proprietorship for $990,000 Communications on August 15, 2021. The assets of the business are: a. Calculate Kayla’s real...

Q: Donna owns 800 shares of common stock in Macaw Corporation (adjusted

Donna owns 800 shares of common stock in Macaw Corporation (adjusted basis of $40,000). She receives a 5% stock dividend when the stock is selling for $60 per share. a. How much gross income must Donn...