Questions from General Taxation

Q: Dr. Randolph, a cash basis taxpayer, knows that he

Dr. Randolph, a cash basis taxpayer, knows that he will be in a lower marginal tax bracket next year. To take advantage of the expected decrease in his tax rate, Dr. Randolph instructs his office mana...

Q: Your client is a new partnership, ARP Associates, which is

Your client is a new partnership, ARP Associates, which is an engineering consulting firm. Generally, ARP bills clients for services at the end of each month. Client billings are about $50,000 each mo...

Q: Alva received dividends on her stocks as follows. Amur Corporation (

Alva received dividends on her stocks as follows. Amur Corporation (a French corporation whose stock is traded on an established U.S. securities market) $60,000 Blaze, Inc., a Delaware corporation 40,...

Q: Roy decides to buy a personal residence, and he goes to

Roy decides to buy a personal residence, and he goes to the bank for a $150,000 loan. The bank tells Roy that he can borrow the funds at 4% if his father will guarantee the debt. Roy’s father, Hal, ow...

Q: Brad is the president of the Yellow Corporation. He and other

Brad is the president of the Yellow Corporation. He and other members of his family control the corporation. Brad has a temporary need for $50,000, and the corporation has excess cash. He could borrow...

Q: Ridge is a generous individual. During the year, he made

Ridge is a generous individual. During the year, he made interest-free loans to various family members when the Federal interest rate was 3%. What are the Federal tax consequences of the following loa...

Q: Indicate whether the imputed interest rules apply in the following situations.

Indicate whether the imputed interest rules apply in the following situations. a. Mike loaned his sister $90,000 to buy a new home. Mike did not charge interest on the loan. The Federal rate was 5%....

Q: Vito is the sole shareholder of Vito, Inc. The corporation

Vito is the sole shareholder of Vito, Inc. The corporation also employs him. On June 30, 2015, Vito borrowed $8,000 from Vito, Inc., and on July 1, 2016, he borrowed an additional $10,000. Both loans...

Q: How does the tax benefit rule apply in the following cases?

How does the tax benefit rule apply in the following cases? a. In 2013, the Orange Furniture Store, an accrual method taxpayer, sold furniture on credit for $1,000 to Sammy. Orange’s cost of the furn...

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...