Questions from General Taxation

Q: Tyneka inherited 1,000 shares of Aqua, Inc. stock

Tyneka inherited 1,000 shares of Aqua, Inc. stock from Joe. Joe’s basis was $35,000, and the fair market value on July 1, 2015 (the date of death), was $45,000. The shares were distributed to Tyneka o...

Q: Sam owns 1,500 shares of Eagle, Inc. stock

Sam owns 1,500 shares of Eagle, Inc. stock that he purchased over 10 years ago for $80,000. Although the stock has a current market value of $52,000, Sam still views the stock as a solid long-term inv...

Q: Abby’s home had a basis of $360,000 ($160

Abby’s home had a basis of $360,000 ($160,000 attributable to the land) and a fair market value of $340,000 ($155,000 attributable to the land) when she converted 70% of it to business use by opening...

Q: Surendra’s personal residence originally cost $340,000 (ignore land

Surendra’s personal residence originally cost $340,000 (ignore land). After living in the house for five years, he converts it to rental property. At the date of conversion, the fair market value of t...

Q: Sue exchanges a sport utility vehicle (adjusted basis of $16

Sue exchanges a sport utility vehicle (adjusted basis of $16,000; fair market value of $19,500) for cash of $2,000 and a pickup truck (fair market value of $17,500). Both vehicles are for business use...

Q: A warehouse owned by M&S (a partnership) and

A warehouse owned by M&S (a partnership) and used in its business (i.e., to store inventory) is being condemned by the city to provide a right-of-way for a highway. The warehouse has appreciated by $1...

Q: How does the tax benefit rule apply in the following cases?

How does the tax benefit rule apply in the following cases? a. In 2013, the Orange Furniture Store, an accrual method taxpayer, sold furniture on credit for $1,000 to Sammy. Orange’s cost of the furn...

Q: Tanya Fletcher owns undeveloped land (adjusted basis of $80,

Tanya Fletcher owns undeveloped land (adjusted basis of $80,000 and fair market value of $92,000) on the East Coast. On January 4, 2015, she exchanges it with Martin (an unrelated party) for undevelop...

Q: Starling Corporation exchanges a yellow bus (used in its business)

Starling Corporation exchanges a yellow bus (used in its business) for Robin Corporation’s gray bus and some garage equipment (used in its business). The assets have the following characteristics: a....

Q: Maple Company owns a machine (adjusted basis of $90,

Maple Company owns a machine (adjusted basis of $90,000; fair market value of $125,000) that it uses in its business. Maple exchanges it for another machine (worth $100,000) and stock (worth $25,000)....