Questions from General Taxation

Q: Siena Industries (a sole proprietorship) sold three § 1231 assets

Siena Industries (a sole proprietorship) sold three § 1231 assets on October 10, 2015. Data on these property dispositions are as follows. a. Determine the amount and the character of...

Q: On December 1, 2013, Lavender Manufacturing Company (a corporation

On December 1, 2013, Lavender Manufacturing Company (a corporation) purchased another company’s assets, including a patent. The patent was used in Lavender’s manufacturing operations; $49,500 was allo...

Q: Larry is the sole proprietor of a trampoline shop. During 2015

Larry is the sole proprietor of a trampoline shop. During 2015, the following transactions occurred. • Unimproved land adjacent to the store was condemned by the city on February 1. The condemnation...

Q: In a § 1031 like-kind exchange, Rafael exchanges equipment

In a § 1031 like-kind exchange, Rafael exchanges equipment that originally cost $200,000. On the date of the exchange, the equipment given up has an adjusted basis of $85,000 and a fair market value o...

Q: Dexter owns a large tract of land and subdivides it for sale

Dexter owns a large tract of land and subdivides it for sale. Assume that Dexter meets all of the requirements of § 1237 and during the tax year sells the first eight lots to eight different buyers fo...

Q: Indicate whether the imputed interest rules apply in the following situations.

Indicate whether the imputed interest rules apply in the following situations. a. Mike loaned his sister $90,000 to buy a new home. Mike did not charge interest on the loan. The Federal rate was 5%....

Q: Coline has the following capital gain and loss transactions for 2015.

Coline has the following capital gain and loss transactions for 2015. Short-term capital gain $ 5,000 Short-term capital loss (2,100) Long-term capital gain (28%) 6,000 Long-term capital gain (15%)...

Q: Elliott has the following capital gain and loss transactions for 2015.

Elliott has the following capital gain and loss transactions for 2015. Short-term capital gain $ 1,500 Short-term capital loss (3,600) Long-term capital gain (28%) 12,000 Long-term capital gain (2...

Q: Renata Corporation purchased equipment in 2013 for $180,000 and

Renata Corporation purchased equipment in 2013 for $180,000 and has taken $83,000 of regular MACRS depreciation. Renata Corporation sells the equipment in 2015 for $110,000. What is the amount and cha...

Q: Sissie owns two items of business equipment. Both were purchased in

Sissie owns two items of business equipment. Both were purchased in 2011 for $100,000, both have a 7-year MACRS recovery period, and both have an adjusted basis of $37,490. Sissie is considering selli...