Questions from General Taxation

Q: William, Wally, and Wilma want to form a corporation.

William, Wally, and Wilma want to form a corporation. William has cash of $100,000; Wally has property valued at $100,000 with a basis of $80,000; and Wilma has property valued at $50,000 that has a $...

Q: What are the ownership and use tests that must be met to

What are the ownership and use tests that must be met to exclude the maximum gain on the sale of a personal residence? Under what circumstances may the owner of a personal residence exclude gain if th...

Q: The Glades Corporation located a building it would like to have for

The Glades Corporation located a building it would like to have for its new warehouse. The corporation has contacted the owner about making a trade for its existing property. The owner of the desired...

Q: The Timberlake Corporation has an opportunity to sell its manufacturing facility to

The Timberlake Corporation has an opportunity to sell its manufacturing facility to Carroll Corporation for $4,500,000. The property has a basis of $2,000,000, and the prospective purchaser is willing...

Q: The Barnard Corporation needs additional cash to improve its facilities. It

The Barnard Corporation needs additional cash to improve its facilities. It can borrow $2,000,000 from a bank at 9 percent interest for 10 years, with a balloon payment of the entire principal at the...

Q: The Overseas Corporation has taxable income of $250,000 before

The Overseas Corporation has taxable income of $250,000 before either a deduction for foreign taxes paid or the foreign tax credit. It paid foreign taxes of $75,000 on foreign income of $300,000. Assu...

Q: The Cooper Corporation is trying to do some year-end tax

The Cooper Corporation is trying to do some year-end tax planning due to a large bond issue that is coming due. To meet this debt payment, Cooper already has sold $4,000,000 of business assets at a ga...

Q: One of Corbett Corporation’s shareholders, Gene, has severe financial problems

One of Corbett Corporation’s shareholders, Gene, has severe financial problems due to extensive medical expenses. He has approached the company for a loan, but the other shareholders on the board of d...

Q: Clare and Cora have been making wedding cakes in their homes for

Clare and Cora have been making wedding cakes in their homes for several years. The Health Department just learned about this and now requires them to shut down or find a commercial kitchen that can b...

Q: Cynthia needs your advice regarding which form of business entity to choose

Cynthia needs your advice regarding which form of business entity to choose for her new business. She expects the new business will have losses of approximately $80,000 in each of the first two years...