Questions from General Taxation

Q: Richard plans to invest $100,000 for a 50 percent

Richard plans to invest $100,000 for a 50 percent interest in a small business. His friend, Jack, will also invest $100,000 for the remaining 50 percent interest. They expect to generate a 10 percent...

Q: Norman considers the purchase of some investment land from his neighbor,

Norman considers the purchase of some investment land from his neighbor, Robin, a high school math teacher. Robin purchased the land 10 years ago for $6,000. They have agreed on payments of $800 every...

Q: Debbie owns investment land that she purchased 10 years ago for $

Debbie owns investment land that she purchased 10 years ago for $12,000. The land consists of two adjoining lots recently appraised at $80,000. She needs $40,000 cash for another investment opportunit...

Q: The manager at Striker Corporation can hire either Ken, a marketing

The manager at Striker Corporation can hire either Ken, a marketing student, who will do research on a marketing plan, or Lisa, a tax student, who will research tax strategies to reduce corporate taxe...

Q: Marlin Corporation must decide between two mutually exclusive projects because it lacks

Marlin Corporation must decide between two mutually exclusive projects because it lacks sufficient personnel to complete both projects. Each project takes two years to complete and the project selecte...

Q: Sandra, a single taxpayer in the 39.6 percent marginal

Sandra, a single taxpayer in the 39.6 percent marginal tax bracket, has $60,000 she can invest in either corporate bonds with a stated interest rate of 9 percent or general revenue bonds issued by her...

Q: Kevin and Elizabeth are negotiating a divorce settlement. Kevin is in

Kevin and Elizabeth are negotiating a divorce settlement. Kevin is in the 33 percent marginal tax bracket and Elizabeth is in the 15 percent marginal tax bracket. Kevin has offered to pay Elizabeth $1...

Q: Robert plans to start a new business that he believes will have

Robert plans to start a new business that he believes will have steady growth in profits for the next 15 years. He needs to select a method of accounting to use: cash or accrual. He would like to sele...

Q: Palace Company (an accrual-basis taxpayer) is writing the

Palace Company (an accrual-basis taxpayer) is writing the lease agreements for its new apartment complex, Palace Apartments, which will rent for a minimum of $2,000 per month. Palace wants tenants to...

Q: John and Martha are planning to be married. Both are professionals

John and Martha are planning to be married. Both are professionals each with taxable incomes of $89,700 annually. They are deciding on a wedding date. They have two dates to choose from: December 14,...