Questions from Federal Taxation

Q: Taylor has owned and occupied her personal residence (adjusted basis of

Taylor has owned and occupied her personal residence (adjusted basis of $190,000) for four years. In April 2021, she sells the residence for $300,000 (selling expenses are $20,000). On the same day as...

Q: Several years ago Nicolas, a timber dealer, purchased a tract

Several years ago Nicolas, a timber dealer, purchased a tract of land with a substantial stand of trees on it. The land cost $8,000, and the timber cost $250,000. On the first day of 2021, the timber...

Q: Wesley, who is single, listed his personal residence with a

Wesley, who is single, listed his personal residence with a real estate agent on March 3, 2021, at a price of $390,000. He rejected several offers in the $350,000 range during the summer. Finally, on...

Q: Jane and Blair are married taxpayers filing jointly and have 2021 taxable

Jane and Blair are married taxpayers filing jointly and have 2021 taxable income of $107,000. The taxable income includes $5,000 of gain from a capital asset held five years, $2,100 of gain from a cap...

Q: For 2021, Wilma has properly determined taxable income of $36

For 2021, Wilma has properly determined taxable income of $36,000, including $3,000 of unrecaptured § 1250 gain and $8,200 of 0%/15%/20% gain. Wilma qualifies for head-of-household filing status. Comp...

Q: Ramesh owns a beach house (four years) and a cabin

Ramesh owns a beach house (four years) and a cabin in the mountains (six years). His adjusted basis is $300,000 in the beach house and $315,000 in the mountain cabin. Ramesh also rents a townhouse in...

Q: Cisco, a calendar year taxpayer who is age 63, owns

Cisco, a calendar year taxpayer who is age 63, owns a residence in which he has lived for 21 years. The residence is destroyed by fire on August 8, 2021. The adjusted basis is $190,000, and the fair m...

Q: Missy, age 30, has owned her principal residence (adjusted

Missy, age 30, has owned her principal residence (adjusted basis of $225,000) for five years. During the first three years of ownership, she occupied it as her principal residence. During the past two...

Q: Dennis sells short 100 shares of ARC stock at $20 per

Dennis sells short 100 shares of ARC stock at $20 per share on January 15, 2021. He buys 200 shares of ARC stock on April 1, 2021, at $25 per share. On May 2, 2021, he closes the short sale by deliver...

Q: George is the owner of numerous classic automobiles. His intention is

George is the owner of numerous classic automobiles. His intention is to hold the automobiles until they increase in value and then sell them. He rents the automobiles for use in various events (e.g.,...