Questions from General Taxation

Q: Michael has always been overweight, and now he has decided to

Michael has always been overweight, and now he has decided to do some- thing about it. He recently read in a news story that the IRS allows a medical expense deduction for the cost of certain weight r...

Q: Chaz transfers cash of $60,000 to a newly formed

Chaz transfers cash of $60,000 to a newly formed corporation for 100% of the stock. In its initial year, the corporation has net income of $15,000. The income is credited to the earnings and profits a...

Q: Paul, age 62, suffers from emphysema and severe allergies and

Paul, age 62, suffers from emphysema and severe allergies and, upon the recommendation of his physician, has a dust elimination system installed in his personal residence. In connection with the syste...

Q: Norma, who uses the cash method of accounting, lives in

Norma, who uses the cash method of accounting, lives in a state that imposes an income tax. In April 2015, she files her state income tax return for 2014 and pays an additional $1,000 in state income...

Q: In 2015, Kathleen Tweardy incurs $30,000 of interest

In 2015, Kathleen Tweardy incurs $30,000 of interest expense related to her investments. Her investment income includes $7,500 of interest, $6,000 of qualified dividends, and a $12,000 net capital gai...

Q: Helen borrowed $150,000 to acquire a parcel of land

Helen borrowed $150,000 to acquire a parcel of land to be held for investment purposes. During 2015, she paid interest of $12,000 on the loan. She had AGI of $90,000 for the year. Other items related...

Q: In 2006, Liam, who is single, purchased a personal

In 2006, Liam, who is single, purchased a personal residence for $340,000 and took out a mortgage of $200,000 on the property. In May of the current year, when the residence had a fair market value of...

Q: In December of each year, Eleanor Young contributes 10% of

In December of each year, Eleanor Young contributes 10% of her gross income to the United Way (a 50% organization). Eleanor, who is in the 28% marginal tax bracket, is considering the following altern...

Q: Ramon had AGI of $180,000 in 2015. He

Ramon had AGI of $180,000 in 2015. He is considering making a charitable contribution this year to the American Heart Association, a qualified charitable organization. Determine the current allowable...

Q: Linda, age 37, who files as a single taxpayer,

Linda, age 37, who files as a single taxpayer, had AGI of $280,000 for 2015. She incurred the following expenses and losses during the year: Medical expenses (before the 10%-of-AGI limitation) ………………...