Questions from General Taxation

Q: Jebali Company reports gross income of $340,000 and other

Jebali Company reports gross income of $340,000 and other property-related expenses of $229,000 and uses a depletion rate of 14%. Calculate Jebali’s depletion allowance for the current year.

Q: Glenda, a calendar year and cash basis taxpayer, rents property

Glenda, a calendar year and cash basis taxpayer, rents property from Janice. As part of the rental agreement, Glenda pays $8,400 rent on April 1, 2015 for the 12 months ending March 31, 2016. a. How m...

Q: Stanford owns and operates two dry cleaning businesses. He travels to

Stanford owns and operates two dry cleaning businesses. He travels to Boston to discuss acquiring a restaurant. Later in the month, he travels to New York to discuss acquiring a bakery. Stanford does...

Q: Tabitha sells real estate on March 2 for $260,000

Tabitha sells real estate on March 2 for $260,000. The buyer, Ramona, pays the real estate taxes of $5,200 for the calendar year, which is the real estate property tax year. Assume that this is not a...

Q: Sandstorm Corporation decides to develop a new line of paints.

Sandstorm Corporation decides to develop a new line of paints. The project begins in 2015. Sandstorm incurs the following expenses in 2015 in connection with the project: Salaries ……………………………………. $85...

Q: Marie and Ethan form Roundtree Corporation with the transfer of the following

Marie and Ethan form Roundtree Corporation with the transfer of the following. Marie performs personal services for the corporation with a fair market value of $80,000 in exchange for 400 shares of st...

Q: Hamlet acquires a 7-year class asset on November 23,

Hamlet acquires a 7-year class asset on November 23, 2015, for $100,000. Hamlet does not elect immediate expensing under § 179. He does not claim any available additional first-year depreciati...

Q: Lopez acquired a building on June 1, 2010, for $

Lopez acquired a building on June 1, 2010, for $1 million. Calculate Lopez’s cost recovery deduction for 2015 if the building is: a. Classified as residential rental real estate. b. Classified as non...

Q: In 2015, McKenzie purchased qualifying equipment for his business that cost

In 2015, McKenzie purchased qualifying equipment for his business that cost $212,000. The taxable income of the business for the year is $5,600 before consideration of any § 179 deduction. Calculate M...

Q: On April 5, 2015, Kinsey places in service a new

On April 5, 2015, Kinsey places in service a new automobile that cost $36,000. He does not elect § 179 expensing, and he elects not to take any available additional first-year depreciation. The car is...