Questions from Federal Taxation

Q: During 2021, Inez (a single taxpayer) had the following

During 2021, Inez (a single taxpayer) had the following transactions involving capital assets: Gain on the sale of unimproved land (held as an investment for 3 years)………………..$ 6,000 Loss on the sale o...

Q: During 2021, Chester (a married taxpayer filing a joint return

During 2021, Chester (a married taxpayer filing a joint return) had the following transactions involving capital assets: Gain on the sale of an arrowhead collection (acquired as an investment at diffe...

Q: Each year, Tom and Cindy Bates normally have itemized deductions of

Each year, Tom and Cindy Bates normally have itemized deductions of $22,000 (which includes a $4,000 pledge payment to their church). On the advice of a friend, they do the following: in early January...

Q: Determine the effects of the following on a cash basis taxpayer’s gross

Determine the effects of the following on a cash basis taxpayer’s gross income for 2021 and 2022: a. On the morning of December 31, 2021, the taxpayer received a $1,500 check from a customer. The taxp...

Q: Marlene, a cash basis taxpayer, invests in Series EE U

Marlene, a cash basis taxpayer, invests in Series EE U.S. government savings bonds and bank certificates of deposit (CDs). Determine the tax consequences of the following on her 2021 gross income: a....

Q: On January 1, 2021, Kunto, a cash basis taxpayer

On January 1, 2021, Kunto, a cash basis taxpayer, pays $46,228 for a 24-month certificate of deposit. The certificate is priced to yield 4% (the effective interest rate) with interest compounded annua...

Q: Herbert was employed for the first six months of 2021 and earned

Herbert was employed for the first six months of 2021 and earned $90,000 in salary. During the next six months, he collected $8,800 of unemployment compensation, borrowed $12,000 (using his personal r...

Q: Linda and Don are married and file a joint return. In

Linda and Don are married and file a joint return. In 2021, they received $12,000 in Social Security benefits and $35,000 in taxable pension benefits and interest. a. Compute the couple’s adjusted gro...

Q: Drake Appliance Company, an accrual basis taxpayer, sells home appliances

Drake Appliance Company, an accrual basis taxpayer, sells home appliances and service contracts. Determine the effect of each of the following transactions on the company’s 2021 gross income assuming...

Q: Freda is a cash basis taxpayer. In 2021, she negotiated

Freda is a cash basis taxpayer. In 2021, she negotiated her salary for 2022. Her employer offered to pay her $21,000 per month in 2022 for a total of $252,000. Freda countered that she would accept $1...