Questions from Federal Taxation

Q: Tom and Alice Honeycutt, ages 45 and 46, respectively,

Tom and Alice Honeycutt, ages 45 and 46, respectively, live at 101 Glass Road, Delton, MI 49046. Tom is a county employee, and Alice is a self-employed accountant. Tom’s Social Security number is 111-...

Q: An apartment building was acquired in 2012. The depreciation taken on

An apartment building was acquired in 2012. The depreciation taken on the building was $123,000, and the building was sold for a $34,000 gain. What is the maximum amount of 25% gain?

Q: Neal uses the percentage of completion method to report his gross income

Neal uses the percentage of completion method to report his gross income from long-term contracts that were to begin in 2021. In 2022, he completes a contract for more than the estimate of total costs...

Q: Enzo is a single taxpayer with the following gains and losses for

Enzo is a single taxpayer with the following gains and losses for 2021: • $2,100 short-term capital loss. • $24,000 long-term capital gain from sale of stock. • $14,000 § 1231 gain that is all unrecap...

Q: In 2021, Emily receives a distribution of $125,000

In 2021, Emily receives a distribution of $125,000 from her wholly owned calendar year corporation. As of January 1, 2021, the corporation has accumulated E & P of $15,000 and for 2021 has current E &...

Q: Cheng is age 77, and the balance in her traditional IRA

Cheng is age 77, and the balance in her traditional IRA account at the end of December of the prior year is $231,000. Using Exhibit 19.3, calculate Cheng’s required minimum distribution for 2022.

Q: Kim is a 40% shareholder in Taupe, a calendar year

Kim is a 40% shareholder in Taupe, a calendar year S corporation. During 2021, Taupe had an operating loss of $200,000. If Kim has a basis of $50,000 in his stock and has made a loan to Taupe of $20,0...

Q: Lee inherits a traditional IRA at the end of 2021.

Lee inherits a traditional IRA at the end of 2021. a. If Lee inherits the IRA from her spouse when the value is $231,050, how must the balance be distributed to her? b. If Lee inherits the IRA from he...

Q: The U.S. tax system allows many businesses to use

The U.S. tax system allows many businesses to use the cash method of accounting. Find another country that allows some businesses to use the cash method, and explain how that system compares to the U....

Q: Using the legend provided below, classify each statement under 2021 tax

Using the legend provided below, classify each statement under 2021 tax law. a. A child care credit is available. b. The deduction of charitable contributions is subject to percentage limitation(s). c...