Questions from Federal Taxation

Q: How do the all events and economic performance requirements apply to the

How do the all events and economic performance requirements apply to the following transactions by an accrual basis taxpayer? a. The company guarantees its products for six months. At the end of 2021,...

Q: Ross Company is a C corporation providing property management services. Ross

Ross Company is a C corporation providing property management services. Ross has used the cash method since inception because its gross receipts did not exceed $26,000,000. This year its average annua...

Q: Raven Finance Company experiences bad debts of about 3% of its

Raven Finance Company experiences bad debts of about 3% of its outstanding loans. At the end of the year, the company had outstanding recei - vables of $18,000,000. This balance included $2,000,000 of...

Q: Jeffrey Boyd, the president of Eagle Furniture Company (average annual

Jeffrey Boyd, the president of Eagle Furniture Company (average annual gross receipts of $30,000,000), has prepared the company’s financial statements and income tax returns for the past 15 years. In...

Q: Jamal purchased equipment and used materials to develop a patent. The

Jamal purchased equipment and used materials to develop a patent. The development costs were deducted on prior returns. The bases and fair market values of the assets are presented below. Sarah has ma...

Q: Kay, who is not a real estate dealer, sold an

Kay, who is not a real estate dealer, sold an apartment house to Polly during the current year (2021). The closing statement for the sale is as follows. During 2021, Kay collected $9,000 in principal...

Q: Meredith, who is single, would like to contribute $6

Meredith, who is single, would like to contribute $6,000 annually to her Roth IRA. Her AGI is $126,000. a. What is the maximum amount that Meredith can contribute? Show your calculations using Microso...

Q: On June 30, 2021, Kelly sold property for $240

On June 30, 2021, Kelly sold property for $240,000 cash and a $960,000 note due on September 30, 2022. The note pays 6% interest, which is higher than the Federal rate. Kelly’s cost of the property wa...

Q: On December 30, 2020, Maud sold land to her son

On December 30, 2020, Maud sold land to her son, Charles, for $50,000 cash and a 7% installment note for $350,000, payable over 10 years. Maud’s cost of the land was $150,000. In October 2022, after C...

Q: George sold land to an unrelated party in 2020. His basis

George sold land to an unrelated party in 2020. His basis in the land was $45,000, and the selling price was $120,000—$30,000 payable at closing and $30,000 (plus 10% interest) due January 1, 2021, 20...