Questions from General Taxation

Q: Grace acquired an activity four years ago. The loss from the

Grace acquired an activity four years ago. The loss from the activity is $50,000 in the current year (at-risk basis of $40,000 as of the beginning of the year). Without considering the loss from the a...

Q: Jonathan, a physician, earns $200,000 from his

Jonathan, a physician, earns $200,000 from his practice. He also receives $18,000 in dividends and interest from various portfolio investments. During the year, he pays $45,000 to acquire a 20% intere...

Q: Five years ago, Gerald invested $150,000 in a

Five years ago, Gerald invested $150,000 in a passive activity, his sole investment venture. On January 1, 2014, his amount at risk in the activity was $30,000. His shares of the income and losses wer...

Q: You have just met with Scott Myers (603 Pittsfield Drive,

You have just met with Scott Myers (603 Pittsfield Drive, Champaign, IL 61821), a successful full-time real estate developer and investor. During your meeting, you discussed his tax situation because...

Q: Bonnie and Jake (ages 35 and 36, respectively) are

Bonnie and Jake (ages 35 and 36, respectively) are married with no dependents and live in Montana (not a community property state). Because Jake has large medical expenses, they seek your advice about...

Q: During the current year, Gene, a CPA, performs

During the current year, Gene, a CPA, performs services as follows: 1,800 hours in his tax practice and 50 hours in an apartment leasing operation in which he has a 15% interest. Because of his overs...

Q: In January 2015, Wanda transferred machinery worth $200,000

In January 2015, Wanda transferred machinery worth $200,000 (adjusted basis of $30,000) to a controlled corporation, Oriole, Inc. The transfer qualified under § 351. Wanda had deducted $165,000 of dep...

Q: Ida, who has AGI of $80,000 before considering

Ida, who has AGI of $80,000 before considering rental activities, is active in three separate real estate rental activities. I da has a marginal tax rate of 28%. She has $12,000 of losses from Activit...

Q: Champ received a $10,000 distribution from NeatCo, a

Champ received a $10,000 distribution from NeatCo, a U.S. C corporation. NeatCo’s earnings and profits for the year totaled $6,000. How much dividend income does Champ recognize? What Federal income t...

Q: Lisbeth makes the following interest-free loans during the year.

Lisbeth makes the following interest-free loans during the year. The relevant Federal interest rate is 5 percent, and none of the loans are motivated by tax avoidance. All of the loans were outstandin...