Questions from General Taxation

Q: Platinum, Inc., has determined its taxable income as $215

Platinum, Inc., has determined its taxable income as $215,000 before considering the results of its capital gain or loss transactions. Platinum has a short- term capital loss of $24,000, a long-term c...

Q: The taxpayer is an antiques collector and is going to sell an

The taxpayer is an antiques collector and is going to sell an antique purchased many years ago for a large gain. The facts and circumstances indicate that the taxpayer might be classified as a dealer...

Q: In 2015, Bertha Jarow (head of household with three dependents

In 2015, Bertha Jarow (head of household with three dependents) had a $28,000 loss from the sale of a personal residence. She also purchased from an individual inventor for $7,000 (and resold in two m...

Q: Bridgette is known as the “doll lady.” She started collecting

Bridgette is known as the “doll lady.” She started collecting dolls as a child, always received one or more dolls as gifts on her birthday, never sold any dolls, and eventually owned 600 dolls. She is...

Q: Ridge is a generous individual. During the year, he made

Ridge is a generous individual. During the year, he made interest-free loans to various family members when the Federal interest rate was 3%. What are the Federal tax consequences of the following l...

Q: Two years ago, Harriet Company (an unincorporated entity) developed

Two years ago, Harriet Company (an unincorporated entity) developed a process for preserving doughnuts that gives the doughnuts a much longer shelf life. The process is not patented or copyrighted, an...

Q: A sculpture that Tulip & Co. held for investment was destroyed

A sculpture that Tulip & Co. held for investment was destroyed in a flood. The sculpture was insured, and Tulip had a $60,000 gain from this casualty. It also had a $17,000 loss from an uninsured anti...

Q: Harold, a CPA, has a new client who recently moved

Harold, a CPA, has a new client who recently moved to town. Harold pre- pares the client’s current-year tax return, which shows a net § 1231 gain. Harold calls the client to request copies of the retu...

Q: Geranium, Inc., has the following net § 1231 results for

Geranium, Inc., has the following net § 1231 results for each of the years shown. What is the nature of the net gain in 2014 and 2015?

Q: Delphinium Company owns two parcels of land (§ 1231 assets). One

Delphinium Company owns two parcels of land (§ 1231 assets). One parcel can be sold at a loss of $60,000, and the other parcel can be sold at a gain of $70,000. The company has no nonrecaptured § 1231...