Questions from General Taxation

Q: John, an engineer, operates a separate business that he

John, an engineer, operates a separate business that he acquired eight years ago. If he participates 85 hours in the business and it incurs a loss of $34,000, under what circumstances can John claim...

Q: Rene retired from public accounting after a long and successful career of

Rene retired from public accounting after a long and successful career of 45 years. As part of her retirement package, she continues to share in the profits and losses of the firm, albeit at a lower r...

Q: Kristin Graf (123 Baskerville Mill Road, Jamison, PA 18929

Kristin Graf (123 Baskerville Mill Road, Jamison, PA 18929) is trying to decide how to invest a $10,000 inheritance. One option is to make an additional investment in Rocky Road Excursions in which sh...

Q: The end of the year is approaching, and Maxine has begun

The end of the year is approaching, and Maxine has begun to focus on ways of minimizing her income tax liability. Several years ago, she purchased an nvestment in Teal Limited Partnership, which is su...

Q: Dr. Randolph, a cash basis taxpayer, knows that he

Dr. Randolph, a cash basis taxpayer, knows that he will be in a lower marginal tax bracket next year. To take advantage of the expected decrease in his tax rate, Dr. Randolph instructs his office mana...

Q: A number of years ago, Lee acquired a 20% interest

A number of years ago, Lee acquired a 20% interest in the BlueSky Partner- ship for $60,000. The partnership was profitable through 2014, and Lee’s amount at risk in the partnership interest was $120,...

Q: Grace acquired an activity four years ago. The loss from the

Grace acquired an activity four years ago. The loss from the activity is $50,000 in the current year (at-risk basis of $40,000 as of the beginning of the year). Without considering the...

Q: Jonathan, a physician, earns $200,000 from his

Jonathan, a physician, earns $200,000 from his practice. He also receives $18,000 in dividends and interest from various portfolio investments. During the year, he pays $45,000 to acquire a 20% intere...

Q: Five years ago, Gerald invested $150,000 in a

Five years ago, Gerald invested $150,000 in a passive activity, his sole investment venture. On January 1, 2014, his amount at risk in the activity was $30,000. His shares of the income and losses wer...

Q: You have just met with Scott Myers (603 Pittsfield Drive,

You have just met with Scott Myers (603 Pittsfield Drive, Champaign, IL 61821), a successful full-time real estate developer and investor. During your meeting, you discussed his tax situation because...