Questions from General Taxation

Q: Bonnie and Jake (ages 35 and 36, respectively) are

Bonnie and Jake (ages 35 and 36, respectively) are married with no dependents and live in Montana (not a community property state). Because Jake has large medical expenses, they seek your advice about...

Q: During the current year, Gene, a CPA, performs

During the current year, Gene, a CPA, performs services as follows: 1,800 hours in his tax practice and 50 hours in an apartment leasing operation in which he has a 15% interest. Because of his overs...

Q: Ida, who has AGI of $80,000 before considering

Ida, who has AGI of $80,000 before considering rental activities, is active in three separate real estate rental activities. I da has a marginal tax rate of 28%. She has $12,000 of losses from Activit...

Q: In the current year, Abe gives an interest in a passive

In the current year, Abe gives an interest in a passive activity to his daughter, Andrea. The value of the interest at the date of the gift is $25,000, and its adjusted basis to Abe is $13,000. During...

Q: Bob owns a collection agency. He purchases uncollected accounts receivable from

Bob owns a collection agency. He purchases uncollected accounts receivable from other businesses at 60% of their face value and then attempts to collect these accounts. During the current year, Bob co...

Q: Your client is a new partnership, ARP Associates, which is

Your client is a new partnership, ARP Associates, which is an engineering consulting firm. Generally, ARP bills clients for services at the end of each month. Client billings are about $50,000 each mo...

Q: On May 9, 2013, Calvin acquired 250 shares of stock

On May 9, 2013, Calvin acquired 250 shares of stock in Aero Corporation, a new startup company, for $68,750. Calvin acquired the stock directly from Aero, and it is classified as § 1244 stock (at the...

Q: Mary’s diamond ring was stolen in 2014. She originally paid $

Mary’s diamond ring was stolen in 2014. She originally paid $8,000 for the ring, but it was worth considerably more at the time of the theft. Mary filed an insurance claim for the stolen ring, but the...

Q: Determine the treatment of a loss on rental property under the following

Determine the treatment of a loss on rental property under the following facts: Basis ……………………………………….$650,000 FMV before the loss……………………800,000 FMV after the loss……………………..200,000

Q: Rhonda has an adjusted basis and an at-risk amount of

Rhonda has an adjusted basis and an at-risk amount of $7,500 in a passive activity at the beginning of the year. She also has a suspended passive loss of $1,500 carried over from the prior year. Durin...