Questions from Federal Taxation

Q: Javier is the sole proprietor of a trampoline shop. During 2021

Javier is the sole proprietor of a trampoline shop. During 2021, the following transactions occurred: • Unimproved land adjacent to the store was condemned by the city on February 1. The condemnation...

Q: On January 1, 2012, Stephanie Bridges acquired depreciable real property

On January 1, 2012, Stephanie Bridges acquired depreciable real property for $50,000. She used straight-line depreciation to compute the asset’s cost recovery. The asset was sold for $96,000 on Januar...

Q: Hana is in the 24% tax bracket and owns depreciable business

Hana is in the 24% tax bracket and owns depreciable business equipment that she purchased several years ago for $135,000. She has taken $100,000 of depreciation on the equipment, and it is worth $55,0...

Q: Anna received tangible personal property with a fair market value of $

Anna received tangible personal property with a fair market value of $65,000 as a gift in 2019. The donor had purchased the property for $77,000 and had taken $77,000 of depreciation. Anna used the pr...

Q: Corporations are subject to a flat income tax rate of 21%;

Corporations are subject to a flat income tax rate of 21%; individuals have graduated rates from 10% to 37%. Does this make the corporate entity a better entity choice for tax purposes? Explain.

Q: Miguel receives tangible personal property as an inheritance in 2019. The

Miguel receives tangible personal property as an inheritance in 2019. The property was depreciated by the deceased (Miguel’s father), and Miguel will also depreciate it. At the date of the deceased’s...

Q: Dedriea contributes to her wholly owned corporation some tangible personal property she

Dedriea contributes to her wholly owned corporation some tangible personal property she had used in her sole proprietorship business and depreciated. She had acquired the property for $566,000 and had...

Q: Tan Corporation purchased depreciable tangible personal property for $100,000

Tan Corporation purchased depreciable tangible personal property for $100,000 in 2019 and immediately expensed the entire cost under § 179. In 2021, when the property was worth $80,000, Tan distribute...

Q: Jasmine owned rental real estate that she sold to her tenant in

Jasmine owned rental real estate that she sold to her tenant in an installment sale. Jasmine acquired the property in 2009 for $400,000; took $178,000 of depreciation on it; and sold it for $210,000,...

Q: Sasha and Tara are married, filing jointly. Their correctly determined

Sasha and Tara are married, filing jointly. Their correctly determined 2021 taxable income is $127,000. This taxable income includes a $5,000 § 1231 gain from the sale of business land that was includ...