Questions from General Taxation

Q: Prior to BJ Corporation’s year-end, its sole shareholder comes

Prior to BJ Corporation’s year-end, its sole shareholder comes to you for advice. BJ is an established S corporation that was profitable until two years ago when the economy faltered. Due to distribut...

Q: An S corporation shareholder is currently in the 28 percent tax bracket

An S corporation shareholder is currently in the 28 percent tax bracket. His S corporation is going to pass a very large loss through to him that would otherwise offset other income, except for the fa...

Q: In the current year, Serena sold investment land for $105

In the current year, Serena sold investment land for $105,000 that she purchased six years ago for $61,000; a diamond engagement ring for $1,800 that her ex-fiancée had given her nine months ago (purc...

Q: Your client, Ted, would like your assistance in selecting one

Your client, Ted, would like your assistance in selecting one of the following assets to give to his 16-year-old daughter. The corporate stock pays only $100 in dividend income each year but has doub...

Q: When Godfrey died in 2017, his assets were valued as follows

When Godfrey died in 2017, his assets were valued as follows: The executor sold the stock two months after the decedent’s death for $2,200,000. The bonds were sold seven months afte...

Q: You are the trustee for the Steadman Trust. The trust has

You are the trustee for the Steadman Trust. The trust has $50,000 of interest income, all of which it plans to distribute to its beneficiaries in the current year. The trust also has $14,000 in net ca...

Q: Oscar (age 70) and Maggie (age 60) were

Oscar (age 70) and Maggie (age 60) were married and jointly owned a personal residence valued at $3,800,000 when Oscar died in 2017. Oscar also owned stocks valued at $4,700,000; an art collection val...

Q: Robert owns some investment land that has a basis of $1

Robert owns some investment land that has a basis of $1,000 and a fair market value of $22,000. He expects that it will continue to appreciate in value. Robert’s uncle, Mike, has a terminal illness an...

Q: Jessica, a professional violinist with the Lincoln Symphony Orchestra, purchased

Jessica, a professional violinist with the Lincoln Symphony Orchestra, purchased a 100-yearold antique violin at a cost of $180,000. She thinks that it is a good investment because she knows that it w...

Q: Juan owns 40 percent and Mario owns 60 percent of Crispy Donuts

Juan owns 40 percent and Mario owns 60 percent of Crispy Donuts, Inc. (CDI). Juan wants to buy out Mario’s interest in CDI, so he arranges a stock sale agreement under which CDI will redeem (purchase)...