Questions from General Taxation

Q: Rose Company owns Machine A (adjusted basis of $12,

Rose Company owns Machine A (adjusted basis of $12,000 and fair market value of $15,000), which it uses in its business. Rose sells Machine A for $15,000 to Aubry (a dealer) and then purchases Machine...

Q: Cardinal Properties, Inc., exchanges real estate used in its business

Cardinal Properties, Inc., exchanges real estate used in its business along with stock for real estate to be held for investment. The stock transferred has an adjusted basis of $45,000 and a fair mark...

Q: The outstanding stock in Red, Blue, and Green Corporations,

The outstanding stock in Red, Blue, and Green Corporations, each of which has only one class of stock, is owned by the following unrelated individuals: a. Determine whether Red, Blue, and Green Corpo...

Q: Determine the realized, recognized, and postponed gain or loss and

Determine the realized, recognized, and postponed gain or loss and the new basis for each of the following like-kind exchanges:

Q: Turquoise Realty Company owns an apartment house that has an adjusted ba

Turquoise Realty Company owns an apartment house that has an adjusted ba- sis of $760,000 but is subject to a mortgage of $192,000. Turquoise transfers the apartment house to Dove, Inc., and receives...

Q: Randall owns an office building (adjusted basis of $250

Randall owns an office building (adjusted basis of $250,000) that he has been renting to a group of physicians. During negotiations over a new seven-year lease, the physicians offer to purchase the b...

Q: Howard’s roadside vegetable stand (adjusted basis of $275,000

Howard’s roadside vegetable stand (adjusted basis of $275,000) is destroyed by a tractor-trailer accident. He receives insurance proceeds of $240,000 ($300,000 fair market value – $60,000 coinsurance)...

Q: For each of the following involuntary conversions, indicate whether the property

For each of the following involuntary conversions, indicate whether the property acquired qualifies as replacement property, the recognized gain, and the basis for the property acquired. a. A warehou...

Q: Edith’s warehouse (adjusted basis of $450,000) is

Edith’s warehouse (adjusted basis of $450,000) is destroyed by a hurricane in October 2015. Edith, a calendar year taxpayer, receives insurance proceeds of $525,000 in January 2016. Calculate Edith’s...

Q: Wesley, who is single, listed his personal residence with a

Wesley, who is single, listed his personal residence with a real estate agent on March 3, 2015, at a price of $390,000. He rejected several offers in the $350,000 range during the summer. Finally, on...