Questions from General Taxation

Q: Sandstorm Corporation decides to develop a new line of paints.

Sandstorm Corporation decides to develop a new line of paints. The project begins in 2015. Sandstorm incurs the following expenses in 2015 in connection with the project: Salaries ……………………………………. $85...

Q: Hamlet acquires a 7-year class asset on November 23,

Hamlet acquires a 7-year class asset on November 23, 2015, for $100,000. Hamlet does not elect immediate expensing under § 179. He does not claim any available additional first-year depreciatio...

Q: Lopez acquired a building on June 1, 2010, for $

Lopez acquired a building on June 1, 2010, for $1 million. Calculate Lopez’s cost recovery deduction for 2015 if the building is: a. Classified as residential rental real estate. b. Classified as non...

Q: In 2015, McKenzie purchased qualifying equipment for his business that cost

In 2015, McKenzie purchased qualifying equipment for his business that cost $212,000. The taxable income of the business for the year is $5,600 before consideration of any § 179 deduction. Calculate M...

Q: On April 5, 2015, Kinsey places in service a new

On April 5, 2015, Kinsey places in service a new automobile that cost $36,000. He does not elect § 179 expensing, and he elects not to take any available additional first-year depreciation....

Q: Jebali Company reports gross income of $340,000 and other

Jebali Company reports gross income of $340,000 and other property-related expenses of $229,000 and uses a depletion rate of 14%. Calculate Jebali’s depletion allowance for the current year.

Q: Quail Corporation anticipates that being positively perceived by the individual who is

Quail Corporation anticipates that being positively perceived by the individual who is elected mayor will be beneficial for business. Therefore, Quail contributes to the campaigns of both the Democrat...

Q: Melissa, the owner of a sole proprietorship, does not provide

Melissa, the owner of a sole proprietorship, does not provide health insurance for her 20 employees. She plans to spend $1,500 lobbying in opposition to legislation that would require her to provide s...

Q: Ella owns 60% of the stock of Peach, Inc.

Ella owns 60% of the stock of Peach, Inc. The stock has declined in value since she purchased it five years ago. She is going to sell 5% of the stock to a relative. Ella is also going to make a gift o...

Q: Jarret owns City of Charleston bonds with an adjusted basis of $

Jarret owns City of Charleston bonds with an adjusted basis of $190,000. During the year, he receives interest payments of $3,800. Jarret partially financed the purchase of the bonds by borrowing $100...