Questions from General Taxation

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...

Q: Jake and Mary Snow are residents of the state of New York

Jake and Mary Snow are residents of the state of New York. They are cash basis taxpayers and file a joint return for the calendar year. Jake is a licensed master plumber. Two years ago, Jake entered i...

Q: Mary, a single taxpayer, purchased 10,000 shares of

Mary, a single taxpayer, purchased 10,000 shares of § 1244 stock several years ago at a cost of $20 per share. In November of the current year, Mary receives an offer to sell the stock for $12 per sha...

Q: Olaf lives in the state of Minnesota. A tornado hit the

Olaf lives in the state of Minnesota. A tornado hit the area and damaged his home and automobile. Applicable information is as follows: Because of the extensive damage caused by the tornado, the Pres...

Q: Early in the year, Charles, Lane, and Tami form

Early in the year, Charles, Lane, and Tami form the Harrier Corporation for the express purpose of developing a shopping center. All parties are experienced contractors, and they transfer various busi...

Q: In 2012, John opened an investment account with Randy Hansen,

In 2012, John opened an investment account with Randy Hansen, who held himself out to the public as an investment adviser and securities broker. John contributed $200,000 to the account in 2012. John...

Q: Mary, a single taxpayer with two dependent children, has the

Mary, a single taxpayer with two dependent children, has the following items of income and expense during 2015: Gross receipts from business…………………………. $144,000 Business expenses…………………………………………. 180...

Q: In 2014, Fred invested $50,000 in a general

In 2014, Fred invested $50,000 in a general partnership. Fred’s interest is not considered to be a passive activity. If his share of the partnership losses is $35,000 in 2014 and $25,000 in 2015, how...

Q: In the current year, Bill Parker (54 Oak Drive,

In the current year, Bill Parker (54 Oak Drive, St. Paul, MN 55164) is considering making an investment of $60,000 in Best Choice Partnership. The prospectus provided by Bill’s broker indicates that t...

Q: A number of years ago, Kay acquired an interest in a

A number of years ago, Kay acquired an interest in a partnership in which she is not a material participant. Kay’s basis in her partnership interest at the beginning of 2014 is $40,000. Kay’s share of...