Questions from General Taxation

Q: In 2012, John opened an investment account with Randy Hansen,

In 2012, John opened an investment account with Randy Hansen, who held himself out to the public as an investment adviser and securities broker. John contributed $200,000 to the account in 2012. John...

Q: Mary, a single taxpayer with two dependent children, has the

Mary, a single taxpayer with two dependent children, has the following items of income and expense during 2015: Gross receipts from business………………………….$144,000 Business expenses………………………………………….180,0...

Q: In 2014, Fred invested $50,000 in a general

In 2014, Fred invested $50,000 in a general partnership. Fred’s interest is not considered to be a passive activity. If his share of the partnership losses is $35,000 in 2014 and $25,000 in 2015, how...

Q: Drake Appliance Company, an accrual basis taxpayer, sells home appliances

Drake Appliance Company, an accrual basis taxpayer, sells home appliances and service contracts. Determine the effects of each of the following transactions on the company’s 2015 gross income assuming...

Q: In the current year, Bill Parker (54 Oak Drive,

In the current year, Bill Parker (54 Oak Drive, St. Paul, MN 55164) is considering making an investment of $60,000 in Best Choice Partnership. The prospectus provided by Bill’s broker indicates that t...

Q: A number of years ago, Kay acquired an interest in a

A number of years ago, Kay acquired an interest in a partnership in which she is not a material participant. Kay’s basis in her partnership interest at the beginning of 2014 is $40,000. Kay’s share of...

Q: Jorge owns two passive investments, Activity A and Activity B

Jorge owns two passive investments, Activity A and Activity B. He plans to dispose of Activity A in the current year or next year. Juanita has offered to buy Activity A this year for an amount that w...

Q: Sarah has investments in four passive activity partnerships purchased several years ago

Sarah has investments in four passive activity partnerships purchased several years ago. Last year, the income and losses were as follows: Activity...

Q: Leon sells his interest in a passive activity for $100,

Leon sells his interest in a passive activity for $100,000. Determine the tax effect of the sale based on each of the following independent facts: a. Adjusted basis in this investment is $35,000. Los...

Q: In the current year, White, Inc., earns $400

In the current year, White, Inc., earns $400,000 from operations and receives $36,000 in dividends and interest from various portfolio investments. White also pays $150,000 to acquire a 20% interest i...