Q: James Corporation had a net operating loss of $30,000
James Corporation had a net operating loss of $30,000 before claiming any depreciation deductions. James purchased $26,000 in equipment in 2017 but claimed no depreciation on its 2017 tax return.
See AnswerQ: Demark Corporation took delivery of a new machine on December 31,
Demark Corporation took delivery of a new machine on December 31, 2017. Due to the high number of employees out for the holidays, the machine was not set up for use until January 3, 2018.
See AnswerQ: Marble Corporation purchased 300-year-old marble statutes that it
Marble Corporation purchased 300-year-old marble statutes that it displays in the entrance hall of its main office building.
See AnswerQ: Monicon Corporation purchased a $24,000 computer in 2014 and
Monicon Corporation purchased a $24,000 computer in 2014 and elected to expense it under Section 179. In 2017, the IRS audited Monicon and determined that its taxable income was incorrectly calculated...
See AnswerQ: The Gallagher Farms has been in business for a number of years
The Gallagher Farms has been in business for a number of years. During the peak planting and harvesting season, it hired a number of temporary workers. To house the temporary workers, it built three b...
See AnswerQ: What is an installment sale? If a transaction qualifies for installment
What is an installment sale? If a transaction qualifies for installment sale treatment, when will the taxpayer be taxed on the sale? What does a taxpayer do if the taxpayer does not want to use the in...
See AnswerQ: Martco, a manufacturer and seller of eyeglasses and contact lenses,
Martco, a manufacturer and seller of eyeglasses and contact lenses, purchased all the stock of Fetco, a manufacturer of hearing aids. Management of Martco quickly had second thoughts about keeping Fet...
See AnswerQ: Geralyn and Marco sold their home and moved into a smaller home
Geralyn and Marco sold their home and moved into a smaller home. They used their Section 121 election to exclude their $20,000 gain on the sale of the larger home. Six months after they moved into the...
See AnswerQ: Kwan Lu bought 100 shares of Duchco stock on July 25,
Kwan Lu bought 100 shares of Duchco stock on July 25, year 3, for $1,000. The company declared bankruptcy on July 8 of year 5, and his stock became worthless.
See AnswerQ: Seth and Jacob are brothers who own all of Marboro Corporation’s 2
Seth and Jacob are brothers who own all of Marboro Corporation’s 2,000 shares of outstanding common stock. Seth owns 1,100 shares to Jacob’s 900 shares, and this has caused many problems over the year...
See Answer
