Questions from General Taxation

Q: Abby’s home had a basis of $360,000 ($160

Abby’s home had a basis of $360,000 ($160,000 attributable to the land) and a fair market value of $340,000 ($155,000 attributable to the land) when she converted 70% of it to business use by opening...

Q: Surendra’s personal residence originally cost $340,000 (ignore land

Surendra’s personal residence originally cost $340,000 (ignore land). After living in the house for five years, he converts it to rental property. At the date of conversion, the fair market value of t...

Q: In each of the following independent situations, determine the corporation’s income

In each of the following independent situations, determine the corporation’s income tax liability. Assume that all corporations use a calendar year for tax purposes and that the tax...

Q: Sue exchanges a sport utility vehicle (adjusted basis of $16

Sue exchanges a sport utility vehicle (adjusted basis of $16,000; fair market value of $19,500) for cash of $2,000 and a pickup truck (fair market value of $17,500). Both vehicles are for business use...

Q: A warehouse owned by M&S (a partnership) and

A warehouse owned by M&S (a partnership) and used in its business (i.e., to store inventory) is being condemned by the city to provide a right-of-way for a highway. The warehouse has appreciated by $1...

Q: Tanya Fletcher owns undeveloped land (adjusted basis of $80,

Tanya Fletcher owns undeveloped land (adjusted basis of $80,000 and fair market value of $92,000) on the East Coast. On January 4, 2015, she exchanges it with Martin (an unrelated party) for undevelop...

Q: Starling Corporation exchanges a yellow bus (used in its business)

Starling Corporation exchanges a yellow bus (used in its business) for Robin Corporation’s gray bus and some garage equipment (used in its business). The assets have the following characteristics: a....

Q: Maple Company owns a machine (adjusted basis of $90,

Maple Company owns a machine (adjusted basis of $90,000; fair market value of $125,000) that it uses in its business. Maple exchanges it for another machine (worth $100,000) and stock (worth $25,000)....

Q: Tulip, Inc., would like to dispose of some land

Tulip, Inc., would like to dispose of some land it acquired four years ago because the land will not continue to appreciate. Its value has increased by $50,000 over the four-year period. The company...

Q: What is the basis of the new property in each of the

What is the basis of the new property in each of the following exchanges? a. Apartment building held for investment (adjusted basis of $145,000) for office building to be held for investment (fair ma...