Questions from Federal Taxation

Q: On May 9, 2021, Glenna purchases 500 shares of Ignaz

On May 9, 2021, Glenna purchases 500 shares of Ignaz Company stock for $7,500. On June 30, 2021, she writes a call option on the stock, giving the grantee the right to buy the stock for $9,000 during...

Q: Coline has the following capital gain and loss transactions for 2021:

Coline has the following capital gain and loss transactions for 2021: Short-term capital gain …………………………………..$ 5,000 Short-term capital loss …………………………………….(2,100) Long-term capital gain (28%) …………………...

Q: Golf Corporation generates a $40,000 net operating loss in

Golf Corporation generates a $40,000 net operating loss in 2021. Leo Trees, the Golf CEO, expects to offset all of the 2022 taxable income with the NOL. Explain to Leo whether that is possible.

Q: On June 5, 2021, Brown, Inc., a calendar

On June 5, 2021, Brown, Inc., a calendar year taxpayer, receives cash of $750,000 from the county upon condemnation of its warehouse building (adjusted basis of $500,000 and fair market value of $750,...

Q: Elliott has the following capital gain and loss transactions for 2021:

Elliott has the following capital gain and loss transactions for 2021: Short-term capital gain …………………………………………$ 1,500 Short-term capital loss ………………………………………….(3,600) Long-term capital gain (28%) ………...

Q: On February 24, 2021, Allison’s building, with an adjusted

On February 24, 2021, Allison’s building, with an adjusted basis of $1,300,000 (and used in her trade or business), is destroyed by fire. On March 31, 2021, she receives an insurance reimbursement of...

Q: Gary, who is single, sells his principal residence (owned

Gary, who is single, sells his principal residence (owned and occupied by him for seven years) in November 2021 for a realized gain of $148,000. He had purchased a more expensive new residence eight m...

Q: Omar, who is single, sold his principal residence on April

Omar, who is single, sold his principal residence on April 10, 2021, and excluded the realized gain under § 121 (exclusion on the sale of a principal residence). On April 12, 2021, he purchased anothe...

Q: Renata Corporation purchased equipment in 2019 for $180,000 and

Renata Corporation purchased equipment in 2019 for $180,000 and has taken $83,000 of regular MACRS depreciation. Renata Corporation sells the equipment in 2021 for $110,000. What is the amount and cha...

Q: On August 31, 2020, Nolan and Lei, who file

On August 31, 2020, Nolan and Lei, who file a joint return and live in Charleston, South Carolina, sell their personal residence, which they have owned and lived in for 10 years. The realized gain of...