Questions from General Taxation

Q: Leilei operates a sole proprietorship, using the accrual basis of tax

Leilei operates a sole proprietorship, using the accrual basis of tax accounting. Last year, she claimed a $10,000 bad debt deduction for a receivable from Jackie. But this year, Jackie sent her a che...

Q: Lefty completes the following capital asset transactions. Compute Lefty’s recognized capital

Lefty completes the following capital asset transactions. Compute Lefty’s recognized capital gain or loss from these transactions. Long-term gain………. $10,000 Short-term gain………. 4,000 Short-term loss...

Q: Logan and Johnathan exchange land, and the exchange qualifies as like

Logan and Johnathan exchange land, and the exchange qualifies as like kind under § 1031. Because Logan’s land (adjusted basis of $85,000) is worth $100,000 and Johnathan’s land has a fair market value...

Q: Luciana, a nonshareholder, purchases a condominium from her employer for

Luciana, a nonshareholder, purchases a condominium from her employer for $85,000. The fair market value of the condominium is $120,000. What is Luciana’s basis in the condominium and the amount of any...

Q: Lisa sells business property with an adjusted basis of $130,

Lisa sells business property with an adjusted basis of $130,000 to her son, Alfred, for its fair market value of $100,000. a. What is Lisa’s realized and recognized gain or loss? b. What is Alfred’s r...

Q: Arianna’s personal residence has an adjusted basis of $230,000

Arianna’s personal residence has an adjusted basis of $230,000 and a fair market value of $210,000. Arianna converts the personal residence to rental property. What is Arianna’s gain basis? What is he...

Q: Peyton sells an office building and the associated land on May 1

Peyton sells an office building and the associated land on May 1, 2015. Under the terms of the sales contract, Peyton is to receive $1,600,000 in cash. The purchaser is to assume Peyton’s mortgage of...

Q: Red Corporation wants to set up a manufacturing facility in a midwestern

Red Corporation wants to set up a manufacturing facility in a midwestern state. After considerable negotiations with a small town in Ohio, Red accepts the following offer: land (fair market value of $...

Q: In 2015, Simon, age 12, has interest income of

In 2015, Simon, age 12, has interest income of $800 and dividend income of $4,000. He has no investment expenses. His parents have taxable income of $80,200 and file a joint tax return. Assume that no...

Q: Compute the 2015 standard deduction for the following taxpayers. a

Compute the 2015 standard deduction for the following taxpayers. a. Margie is 15 and claimed as a dependent by her parents. She has $800 in dividend income and $1,400 in wages from a part-time job....