Questions from General Taxation

Q: Gaston Corporation distributes § 1245 property as a dividend to its share

Gaston Corporation distributes § 1245 property as a dividend to its share- holders. The property’s fair market value is $580,000, and the adjusted basis is $560,000. In addition, the amount of the rec...

Q: Nicholas owns business equipment with a $155,000 adjusted basis

Nicholas owns business equipment with a $155,000 adjusted basis; he paid $200,000 for the equipment, and it is currently worth $173,000. Nicholas dies suddenly, and his son Alvin inherits the property...

Q: Roy decides to buy a personal residence, and he goes to

Roy decides to buy a personal residence, and he goes to the bank for a $150,000 loan. The bank tells Roy that he can borrow the funds at 4% if his father will guarantee the debt. Roy’s father, Hal, ow...

Q: An individual taxpayer sells some used assets at a garage sale.

An individual taxpayer sells some used assets at a garage sale. Why are none of the proceeds taxable in most situations?

Q: Alison owns a painting that she received as a gift from her

Alison owns a painting that she received as a gift from her aunt 10 years ago. The aunt created the painting. Alison has displayed the painting in her home and has never attempted to sell it. Recently...

Q: During the year, Eugene had the four property transactions summarized below

During the year, Eugene had the four property transactions summarized below. Eugene is a collector of antique glassware and occasionally sells a piece to get funds to buy another. What are the amount...

Q: Rennie owns a video game arcade. He buys vintage video games

Rennie owns a video game arcade. He buys vintage video games from estates, often at much less than the retail value of the property. He usually installs the vintage video games in a special section of...

Q: George is the owner of numerous classic automobiles. His intention is

George is the owner of numerous classic automobiles. His intention is to hold the automobiles until they increase in value and then sell them. He rents the automobiles for use in various events (e.g.,...

Q: Hyacinth, Inc., is a dealer in securities. The firm

Hyacinth, Inc., is a dealer in securities. The firm has spotted a fast-rising company and would like to buy and hold its stock for investment. The stock is currently selling for $2 per share, and Hyac...

Q: Eagle Partners meets all of the requirements of § 1237 (subdivided

Eagle Partners meets all of the requirements of § 1237 (subdivided realty). In 2015, Eagle Partners begins selling lots and sells four separate lots to four dif- ferent purchasers. Eagle Partners also...