Questions from General Taxation

Q: Rose dies with passive activity property having an adjusted basis of $

Rose dies with passive activity property having an adjusted basis of $65,000, suspended losses of $13,000, and a fair market value at the date of her death of $90,000. Of the $13,000 suspended loss ex...

Q: During the past tax year, Jane identified $50,000

During the past tax year, Jane identified $50,000 as a nonbusiness bad debt. In that tax year, Jane had $100,000 of taxable income, of which $5,000 consisted of short-term capital gains. During the cu...

Q: On May 9, 2013, Calvin acquired 250 shares of stock

On May 9, 2013, Calvin acquired 250 shares of stock in Aero Corporation, a new startup company, for $68,750. Calvin acquired the stock directly from Aero, and it is classified as § 1244 stock (at the...

Q: Mary’s diamond ring was stolen in 2014. She originally paid $

Mary’s diamond ring was stolen in 2014. She originally paid $8,000 for the ring, but it was worth considerably more at the time of the theft. Mary filed an insurance claim for the stolen ring, but the...

Q: Rhonda has an adjusted basis and an at-risk amount of

Rhonda has an adjusted basis and an at-risk amount of $7,500 in a passive activity at the beginning of the year. She also has a suspended passive loss of $1,500 carried over from the prior year. Durin...

Q: Noah, who has $62,000 of AGI before

Noah, who has $62,000 of AGI before considering rental activities, has $70,000 of losses from a real estate rental activity in which he actively participates. He also actively participates in another...

Q: Given the following information, determine the ACE adjustment for each year

Given the following information, determine the ACE adjustment for each year.

Q: Dexter owns a large tract of land and subdivides it for sale

Dexter owns a large tract of land and subdivides it for sale. Assume that Dexter meets all of the requirements of § 1237 and during the tax year sells the first eight lots to eight different buyers fo...

Q: Shelia purchases $50,000 of newly issued Gingo Corporation bonds

Shelia purchases $50,000 of newly issued Gingo Corporation bonds for $45,000. The bonds have original issue discount (OID) of $5,000. After Sheila amortized $2,300 of OID and held the bonds for four y...

Q: Olivia wants to buy some vacant land for investment purposes. She

Olivia wants to buy some vacant land for investment purposes. She currently cannot afford the full purchase price. Instead, Olivia pays the landowner $8,000 to obtain an option to buy the land for $17...