Questions from Federal Taxation

Q: The AGI of the Newtons, a married couple, is $

The AGI of the Newtons, a married couple, is $201,000 this year. They would like to contribute to a Roth IRA. a. What is the maximum amount this couple can contribute to a Roth IRA? Show your calculat...

Q: Aliya held vacant land that qualified as an investment asset. She

Aliya held vacant land that qualified as an investment asset. She purchased the vacant land on April 10, 2017. She exchanged the vacant land for a rental house in a qualifying like-kind exchange on Ja...

Q: Roger inherited 100 shares of Periwinkle stock when his mother, Emily

Roger inherited 100 shares of Periwinkle stock when his mother, Emily, died. Emily had acquired the stock for a total of $60,000 on November 15, 2017. She died on August 10, 2021, and the shares were...

Q: For each of the following involuntary conversions, indicate whether the property

For each of the following involuntary conversions, indicate whether the property acquired qualifies as replacement property, any resulting recognized gain, and the basis for the property acquired. a....

Q: Mitchell, a calendar year taxpayer, is the sole proprietor of

Mitchell, a calendar year taxpayer, is the sole proprietor of a fast-food restaurant. His adjusted basis for the building and the related land is $450,000. On March 12, 2021, state authorities notify...

Q: Emily’s warehouse (adjusted basis of $450,000) is

Emily’s warehouse (adjusted basis of $450,000) is destroyed by a hurricane in October 2021. Emily, a calendar year taxpayer, receives insurance proceeds of $525,000 in January 2022. Calculate Emily’s...

Q: Cabel’s warehouse, which has an adjusted basis of $380,

Cabel’s warehouse, which has an adjusted basis of $380,000 and a fair market value of $490,000, is condemned by an agency of the Federal government to make way for a highway interchange. The initial c...

Q: Fred is an investor in vacant land. When he thinks he

Fred is an investor in vacant land. When he thinks he has identified property that would be a good investment, he approaches the landowner, pays the landowner for a “right of first refusal” to purchas...

Q: Wanda, a calendar year taxpayer, owned a building (adjusted

Wanda, a calendar year taxpayer, owned a building (adjusted basis of $250,000) in which she operated a bakery that was destroyed by fire in December 2021. She receives insurance proceeds of $290,000 f...

Q: Karl purchased his residence on January 2, 2020, for $

Karl purchased his residence on January 2, 2020, for $260,000, after having lived in it during 2019 as a tenant under a lease with an option to buy clause. On August 1, 2021, Karl sells the residence...