Questions from General Taxation

Q: Gull Corporation, a cash method, calendar year C corporation,

Gull Corporation, a cash method, calendar year C corporation, was formed and began business on November 1, 2015. Gull incurred the following expenses during its first year of operations (November 1, 2...

Q: Tonya, a Virginia resident, inherited a $100,000

Tonya, a Virginia resident, inherited a $100,000 State of Virginia bond this year. Her marginal Federal income tax rate is 35%, and her marginal state tax rate is 5%. The Virginia bond pays 3.3% inter...

Q: The Egret Company has a 40% combined Federal and state marginal

The Egret Company has a 40% combined Federal and state marginal tax rate. Egret’s board estimates that, if its current president should die, the company would incur $200,000 in costs to find a suitabl...

Q: Laura recently was diagnosed with cancer and has begun chemotherapy treatments.

Laura recently was diagnosed with cancer and has begun chemotherapy treatments. A cancer specialist has given Laura less than one year to live. She has incurred sizable medical bills and other general...

Q: Vic, who was experiencing financial difficulties, was able to adjust

Vic, who was experiencing financial difficulties, was able to adjust his debts as follows. Determine the Federal income tax consequences to Vic. a. Vic is an attorney. Vic owed his uncle $25,000. The...

Q: During the year, Olivia recorded the following transactions involving capital assets

During the year, Olivia recorded the following transactions involving capital assets. Gain on the sale of unimproved land (held as an investment for 4 years) …………………. $ 4,000 Loss on the sale of a c...

Q: Andy reported the following gains and losses from the sale of capital

Andy reported the following gains and losses from the sale of capital assets. Loss on Pigeon Corporation stock (held 9 months) ………………………… ($14,000) Gain on painting (held for 2 years as an investmen...

Q: Pam owns a personal-use boat that has a fair market

Pam owns a personal-use boat that has a fair market value of $35,000 and an adjusted basis of $45,000. Pam’s AGI is $100,000. Calculate the realized and recognized gain or loss if: a. Pam sells the b...

Q: Yancy’s personal residence is condemned as part of an urban renewal project

Yancy’s personal residence is condemned as part of an urban renewal project. His adjusted basis for the residence is $480,000. He receives condemnation proceeds of $460,000 and invests the proceeds in...

Q: Finch, Inc., purchases 1,000 shares of Bluebird Corporation

Finch, Inc., purchases 1,000 shares of Bluebird Corporation stock on October 3, 2015, for $300,000. On December 12, 2015, Finch purchases an additional 750 shares of Bluebird stock for $210,000. Accor...