Questions from General Taxation

Q: George is the owner of numerous classic automobiles. His intention is

George is the owner of numerous classic automobiles. His intention is to hold the automobiles until they increase in value and then sell them. He rents the automobiles for use in various events (e.g.,...

Q: Hyacinth, Inc., is a dealer in securities. The firm

Hyacinth, Inc., is a dealer in securities. The firm has spotted a fast-rising company and would like to buy and hold its stock for investment. The stock is currently selling for $2 per share, and Hyac...

Q: Eagle Partners meets all of the requirements of § 1237 (subdivided

Eagle Partners meets all of the requirements of § 1237 (subdivided realty). In 2015, Eagle Partners begins selling lots and sells four separate lots to four different purchasers. Eagle Partners also s...

Q: Benny purchased $400,000 of Peach Corporation face value bonds

Benny purchased $400,000 of Peach Corporation face value bonds for $320,000 on November 13, 2014. The bonds had been issued with $80,000 of original issue discount because Peach was in financial diffi...

Q: Mac, an inventor, obtained a patent on a chemical process

Mac, an inventor, obtained a patent on a chemical process to clean old aluminum siding so that it can be easily repainted. Mac has a $50,000 tax basis in the patent. Mac does not have the capital to b...

Q: Blue Corporation and Fuchsia Corporation are engaged in a contract negotiation over

Blue Corporation and Fuchsia Corporation are engaged in a contract negotiation over the use of Blue’s trademarked name, DateSiteForSeniors. For a one- time payment of $45,000, Blue licensed Fuchsia to...

Q: Freys, Inc., sells a 12-year franchise to Red

Freys, Inc., sells a 12-year franchise to Red Company. The franchise contains many restrictions on how Red may operate its store. For instance, Red cannot use less than Grade 10 Idaho potatoes; must f...

Q: Maria held vacant land that qualified as an investment asset. She

Maria held vacant land that qualified as an investment asset. She purchased the vacant land on April 10, 2011. She exchanged the vacant land for a rental house in a qualifying like-kind exchange on Ja...

Q: Siga, Inc., a calendar year corporation, records the following

Siga, Inc., a calendar year corporation, records the following gross receipts and taxable income for 2013 through 2015 Siga’s first year of operations was 2013. Is Siga exempt from...

Q: Thrasher Corporation sells short 100 shares of ARC stock at $20

Thrasher Corporation sells short 100 shares of ARC stock at $20 per share on January 15, 2015. It buys 200 shares of ARC stock on April 1, 2015, at $25 per share. On May 2, 2015, Thrasher closes the s...