Questions from General Taxation

Q: On June 5, 2014, Leo purchased and placed in service

On June 5, 2014, Leo purchased and placed in service a new car that cost $20,000. The business-use percentage for the car is always 100%. Leo claims any available additional first-year depreciation. C...

Q: On May 28, 2015, Mary purchased and placed in service

On May 28, 2015, Mary purchased and placed in service a new $20,000 car. The car was used 60% for business, 20% for production of income, and 20% for personal use in 2015. In 2016, the usage changed t...

Q: Accounting students understand that the accrual method of accounting is superior to

Accounting students understand that the accrual method of accounting is superior to the cash method for measuring the income and expenses from an ongoing business for financial reporting purposes. Thu...

Q: In 2015, Muhammad purchased a new computer for $16,

In 2015, Muhammad purchased a new computer for $16,000. The computer is used 100% for business. Muhammad did not make a § 179 election with respect to the computer. He does not claim any available add...

Q: Jamie purchased $100,000 of new office furniture for her

Jamie purchased $100,000 of new office furniture for her business in June of the current year. Jamie understands that if she elects to use ADS to compute her regular income tax, there will be no diffe...

Q: Mike Saxon is negotiating the purchase of a business. The final

Mike Saxon is negotiating the purchase of a business. The final purchase price has been agreed upon, but the allocation of the purchase price to the assets is still being discussed. Apprais...

Q: Sam Jones owns a granite stone quarry. When he acquired the

Sam Jones owns a granite stone quarry. When he acquired the land, Sam allocated $800,000 of the purchase price to the quarry’s recoverable mineral reserves, which were estimated at 10 million tons of...

Q: Jake and Mary Snow are residents of the state of New York

Jake and Mary Snow are residents of the state of New York. They are cash basis taxpayers and file a joint return for the calendar year. Jake is a licensed master plumber. Two years ago, Jake entered i...

Q: Mary, a single taxpayer, purchased 10,000 shares of

Mary, a single taxpayer, purchased 10,000 shares of § 1244 stock several years ago at a cost of $20 per share. In November of the current year, Mary receives an offer to sell the stock for $12 per sha...

Q: Olaf lives in the state of Minnesota. A tornado hit the

Olaf lives in the state of Minnesota. A tornado hit the area and damaged his home and automobile. Applicable information is as follows: Because of the extensive damage caused by the tornado, the Pres...