Questions from Federal Taxation

Q: Barbella purchased a wedding ring for $15 at a yard sale

Barbella purchased a wedding ring for $15 at a yard sale in May. She thought the ring was costume jewelry, but it turned out to be a real diamond ring. She is not in the business of buying and selling...

Q: Maria meets all of the requirements of § 1237 (subdivided realty

Maria meets all of the requirements of § 1237 (subdivided realty). In 2021, she begins selling lots and sells four separate lots to four different purchasers. She also sells two contiguous lots to ano...

Q: An individual taxpayer had a net $1231 loss in 2021.

An individual taxpayer had a net $1231 loss in 2021. Could any of this loss be treated as a long-term capital loss? Why or why not?

Q: Thomas receives tangible personal property as an inheritance from a decedent who

Thomas receives tangible personal property as an inheritance from a decedent who died in 2021. The property was depreciated by the deceased, and Thomas will also depreciate it. At the date of the dece...

Q: Daniela Fletcher owns undeveloped land (adjusted basis of $80,

Daniela Fletcher owns undeveloped land (adjusted basis of $80,000 and fair market value of $92,000) on the East Coast. On January 4, 2021, she exchanges it with Lisa Martin (an unrelated party) for un...

Q: Katie exchanges a building and land (used in her business)

Katie exchanges a building and land (used in her business) for Tyler’s land and building and some equipment (used in his business). a. What are Katie’s recognized g...

Q: Find a state website that has tax forms and instructions for the

Find a state website that has tax forms and instructions for the state. Call that state “X.” Find a discussion in those sources that reveals whether state X taxes gains from the sale of real estate th...

Q: Using information from the IRS Tax Stats website (irs.gov

Using information from the IRS Tax Stats website (irs.gov/ statistics), find a statistic for partnerships that indicates how much total noncapital gain there was in the latest year for which data are...

Q: Your client, Alternate Fuel, Inc. (a regular corporation

Your client, Alternate Fuel, Inc. (a regular corporation), owns three sandwich shops in the Philadelphia area. In 2018, the year Alternate Fuel incorporated, it acquired land on the outskirts of Phila...

Q: Your client, Vernon Jones, is a self-employed attorney

Your client, Vernon Jones, is a self-employed attorney. Vernon uses the cash method of accounting. In reviewing his accounting records to get ready to prepare his tax return for the current year, you...