Q: Benny purchased $400,000 of Peach Corporation face value bonds
Benny purchased $400,000 of Peach Corporation face value bonds for $320,000 on November 13, 2014. The bonds had been issued with $80,000 of original issue discount because Peach was in financial diffi...
See AnswerQ: Carla was the owner of vacant land that she was holding for
Carla was the owner of vacant land that she was holding for investment. She paid $2 million for the land in 2013. Raymond was an investor in vacant land. He thought Carla’s land might be the site of a...
See AnswerQ: Mac, an inventor, obtained a patent on a chemical process
Mac, an inventor, obtained a patent on a chemical process to clean old aluminum siding so that it can be easily repainted. Mac has a $50,000 tax basis in the patent. Mac does not have the capital to b...
See AnswerQ: Brad is the president of the Yellow Corporation. He and other
Brad is the president of the Yellow Corporation. He and other members of his family control the corporation. Brad has a temporary need for $50,000, and the corporation has excess cash. He could borrow...
See AnswerQ: Blue Corporation and Fuchsia Corporation are engaged in a contract negotiation over
Blue Corporation and Fuchsia Corporation are engaged in a contract negotiation over the use of Blue’s trademarked name, DateSiteForSeniors. For a one- time payment of $45,000, Blue licensed Fuchsia to...
See AnswerQ: Freys, Inc., sells a 12-year franchise to Red
Freys, Inc., sells a 12-year franchise to Red Company. The franchise contains many restrictions on how Red may operate its store. For instance, Red cannot use less than Grade 10 Idaho potatoes; must f...
See AnswerQ: Maria held vacant land that qualified as an investment asset. She
Maria held vacant land that qualified as an investment asset. She purchased the vacant land on April 10, 2011. She exchanged the vacant land for a rental house in a qualifying like-kind exchange on Ja...
See AnswerQ: Thrasher Corporation sells short 100 shares of ARC stock at $20
Thrasher Corporation sells short 100 shares of ARC stock at $20 per share on January 15, 2015. It buys 200 shares of ARC stock on April 1, 2015, at $25 per share. On May 2, 2015, Thrasher closes the s...
See AnswerQ: Elaine Case (single with no dependents) has the following transactions
Elaine Case (single with no dependents) has the following transactions in 2015: AGI (exclusive of capital gains and losses) $240,000 Long-term capital gain ………………………………………. 22,000 Long-term capital...
See AnswerQ: Sally has taxable income of $160,000 as of November
Sally has taxable income of $160,000 as of November 30 of this year. She wants to sell a Rodin sculpture that has appreciated $90,000 since she purchased it six years ago, but she does not want to pay...
See Answer
