Questions from General Taxation

Q: For each of the following involuntary conversions, indicate whether the property

For each of the following involuntary conversions, indicate whether the property acquired qualifies as replacement property, the recognized gain, and the basis for the property acquired. a. A warehou...

Q: Edith’s warehouse (adjusted basis of $450,000) is

Edith’s warehouse (adjusted basis of $450,000) is destroyed by a hurricane in October 2015. Edith, a calendar year taxpayer, receives insurance proceeds of $525,000 in January 2016. Calculate Edith’s...

Q: Wesley, who is single, listed his personal residence with a

Wesley, who is single, listed his personal residence with a real estate agent on March 3, 2015, at a price of $390,000. He rejected several offers in the $350,000 range during the summer. Finally, on...

Q: Roby and James have been married for nine years. Roby sells

Roby and James have been married for nine years. Roby sells Plum, Inc. stock that she has owned for four years to James for its fair market value of $180,000. Her adjusted basis is $200,000. a. Calcul...

Q: If a taxpayer sells property for cash, the amount realized consists

If a taxpayer sells property for cash, the amount realized consists of the net proceeds from the sale. For each of the following, indicate the effect on the amount realized: a. The property is sold on...

Q: Pam owns a personal-use boat that has a fair market

Pam owns a personal-use boat that has a fair market value of $35,000 and an adjusted basis of $45,000. Pam’s AGI is $100,000. Calculate the realized and recognized gain or loss if: a. Pam sells the b...

Q: During the past tax year, Jane identified $50,000

During the past tax year, Jane identified $50,000 as a nonbusiness bad debt. In that tax year, Jane had $100,000 of taxable income, of which $5,000 consisted of short-term capital gains. During the cu...

Q: Several years ago, Loon Finance Company, which is in the

Several years ago, Loon Finance Company, which is in the lending business, loaned Sara $30,000 to purchase an automobile to be used for personal purposes. In August of the current year, Sara filed for...

Q: Tammy, a resident of Virginia, is considering whether to purchase

Tammy, a resident of Virginia, is considering whether to purchase a North Carolina bond that yields 4.6% before tax. She is in the 35% Federal marginal tax bracket and the 5% state marginal tax bracke...

Q: Monty loaned his friend Ned $20,000 three years

Monty loaned his friend Ned $20,000 three years ago. Ned signed a note and made payments on the loan. Last year, when the remaining balance was $11,000, Ned filed for bankruptcy and notified Monty th...