Questions from General Taxation

Q: Sebastian purchases two pieces of equipment for $100,000.

Sebastian purchases two pieces of equipment for $100,000. Appraisals of the equipment indicate that the fair market value of the first piece of equipment is $72,000 and that of the second piece of equ...

Q: Camilo’s property, with an adjusted basis of $155,000

Camilo’s property, with an adjusted basis of $155,000, is condemned by the state. Camilo receives property with a fair market value of $180,000 as compensation for the property taken. a. What is Ca...

Q: Constanza, who is single, sells her current personal residence (

Constanza, who is single, sells her current personal residence (adjusted basis of $165,000) for $450,000. She has owned and lived in the house for 30 years. Her selling expenses are $22,500. What is C...

Q: Nancy and her daughter, Kathleen, have been working together in

Nancy and her daughter, Kathleen, have been working together in a cattery called “The Perfect Cat.” Nancy formed the business in 2000 as a sole proprietorship, and it has been very successful. Assets...

Q: Michael holds a full-time job with Brown Company and a

Michael holds a full-time job with Brown Company and a part-time job with Tan Corporation. During a workday, he drives 20 miles to Brown, returns home, has a meal, and then drives 15 miles to Tan. Tan...

Q: Fred travels from Denver to Miami primarily on business. He spends

Fred travels from Denver to Miami primarily on business. He spends five days conducting business and two days sightseeing. His expenses are $400 (air- fare), $150 per day (meals), and $300 per night (...

Q: After accepting his first job upon graduating from college, Christian has

After accepting his first job upon graduating from college, Christian has the following moving expenses: Rental of moving van ………………………. $450 Meals ……………………………………………….200 Lodging……………………………………………. 25...

Q: Andrew sends Godiva chocolates to 10 of his key clients at Christmas

Andrew sends Godiva chocolates to 10 of his key clients at Christmas. The chocolates cost $50 a box not including $4 for gift wrapping and shipping. How much can Andrew deduct?

Q: In the current year, Abe gives an interest in a passive

In the current year, Abe gives an interest in a passive activity to his daughter, Andrea. The value of the interest at the date of the gift is $25,000, and its adjusted basis to Abe is $13,000. During...

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...