Questions from General Taxation

Q: Duck, an accrual basis corporation, sponsored a rock concert on

Duck, an accrual basis corporation, sponsored a rock concert on December 29, 2015. Gross receipts were $300,000. The following expenses were incurred and paid as indicated: Because the coliseum was...

Q: Ted, an agent for Waxwing Corporation, which is an airline

Ted, an agent for Waxwing Corporation, which is an airline manufacturer, is negotiating a sale with a representative of the U.S. government and with a representative of a developing country. Waxwing h...

Q: Linda operates an illegal gambling operation and incurs the following expenses.

Linda operates an illegal gambling operation and incurs the following expenses. Which of these expenses can reduce her taxable income? a. Bribes paid to city employees. b. Salaries to employees. c. S...

Q: Cardinal Corporation is a trucking firm that operates in the Mid-

Cardinal Corporation is a trucking firm that operates in the Mid-Atlantic states. One of Cardinal’s major customers frequently ships goods between Charlotte and Baltimore. Occasionally, the customer s...

Q: Glenda, a calendar year and cash basis taxpayer, rents property

Glenda, a calendar year and cash basis taxpayer, rents property from Janice. As part of the rental agreement, Glenda pays $8,400 rent on April 1, 2015 for the 12 months ending March 31, 2016. a. How m...

Q: Howard buys wrecked cars and stores them on his property. Recently

Howard buys wrecked cars and stores them on his property. Recently, he purchased a 1990 Ford Taurus for $400. If he can sell all of the usable parts, his total proceeds from the Taurus will be over $2...

Q: Determine the taxpayer’s current-year (1) economic income

Determine the taxpayer’s current-year (1) economic income and (2) gross income for tax purposes from the following events. a. Sam’s employment contract as chief executive of a large corporation w...

Q: The roof of your corporation’s office building recently suffered some damage as

The roof of your corporation’s office building recently suffered some damage as the result of a storm. You, the president of the corporation, are negotiating with a carpenter who has quoted two prices...

Q: Dolly is a college student who works as a part-time

Dolly is a college student who works as a part-time server in a restaurant. Her usual tip is 20% of the price of the meal. A customer ordered a piece of pie and said that he would appreciate prompt se...

Q: Tonya, a Virginia resident, inherited a $100,000

Tonya, a Virginia resident, inherited a $100,000 State of Virginia bond this year. Her marginal Federal income tax rate is 35%, and her marginal state tax rate is 5%. The Virginia bond pays 3.3% inter...