Questions from General Taxation

Q: Trip Garage, Inc. (459 Ellis Avenue, Harrisburg,

Trip Garage, Inc. (459 Ellis Avenue, Harrisburg, PA 17111), is an accrual basis taxpayer that repairs automobiles. In late December 2015, the company repaired Samuel Mosley’s car and charged him $1,0...

Q: Nancy, the owner of a very successful hotel chain in the

Nancy, the owner of a very successful hotel chain in the Southeast, is exploring the possibility of expanding the chain into a city in the Northeast. She incurs $35,000 of expenses associated with thi...

Q: Brittany Callihan sold stock (basis of $184,000)

Brittany Callihan sold stock (basis of $184,000) to her son, Ridge, for $160,000, the fair market value. a. What are the tax consequences to Brittany? b. What are the tax consequences to Ridge if...

Q: For each of the following independent transactions, calculate the recognized gain

For each of the following independent transactions, calculate the recognized gain or loss to the seller and the adjusted basis to the buyer. a. Bonnie sells Parchment, Inc. stock (adjusted basis $17...

Q: In 2015, Gray Corporation, a calendar year C corporation,

In 2015, Gray Corporation, a calendar year C corporation, holds a $75,000 charitable contribution carryover from a gift made in 2010. Gray is contemplating a gift of land to a qualified charity in eit...

Q: Dan Simms is the president and sole shareholder of Simms Corporation,

Dan Simms is the president and sole shareholder of Simms Corporation, 1121 Madison Street, Seattle, WA 98121. Dan plans for the corporation to make a charitable contribution to the University of Washi...

Q: Blue Corporation, a manufacturing company, decided to develop a new

Blue Corporation, a manufacturing company, decided to develop a new line of merchandise. The project began in 2015. Blue had the following expenses in connection with the project. The new product wil...

Q: Sarah Ham, operating as a sole proprietor, manufactures printers in

Sarah Ham, operating as a sole proprietor, manufactures printers in the United States. For 2015, the proprietorship has QPAI of $400,000. Sarah’s modified AGI was $350,000. The W–2...

Q: In 2015, Rose, Inc., has QPAI of $4

In 2015, Rose, Inc., has QPAI of $4 million and taxable income of $3 million. Rose pays independent contractors $500,000. Rose’s W–2 wages are $600,000, but only $400,000 of the wages are paid to empl...

Q: On November 4, 2013, Blue Company acquired an asset (

On November 4, 2013, Blue Company acquired an asset (27.5-year residential real property) for $200,000 for use in its business. In 2013 and 2014, respectively, Blue took $642 and $5,128 of cost recove...