Questions from General Taxation

Q: Mona and Denise, mother and daughter, operate a local restaurant

Mona and Denise, mother and daughter, operate a local restaurant as an LLC. The MD LLC earned a profit of $200,000 in the current year. Denise’s equal LLC interest was acquired by gift from Mona. Assu...

Q: In each of the following independent cases in which the partnership owns

In each of the following independent cases in which the partnership owns no hot assets, indicate the following. All of the partners received proportionate distributions. • Whether the partner recogni...

Q: At the beginning of the tax year, Melodie’s basis in the

At the beginning of the tax year, Melodie’s basis in the MIP LLC was $60,000, including Melodie’s $40,000 share of the LLC’s liabilities. At the end of the year, MIP distributed to Melodie cash of $10...

Q: Suzy contributed assets valued at $360,000 (basis of

Suzy contributed assets valued at $360,000 (basis of $200,000) in exchange for her 40% interest in Suz- Anna GP (a general partnership). Anna contributed land and a building valued at $640,000 (basis...

Q: Continue with the facts presented in Problem 30, except that Suz

Continue with the facts presented in Problem 30, except that Suz-Anna was formed as an LLC instead of a general partnership. a. How would Suz-Anna’s ending liabilities be treated? b. How would Suzy’s...

Q: The Sparrow Partnership plans to distribute $200,000 cash to

The Sparrow Partnership plans to distribute $200,000 cash to its partners at the end of the year. Marjorie is a 40% partner and would receive $80,000. Her basis in the partnership is only $10,000, how...

Q: During 2015, Lincoln Company hires seven individuals who are certified

During 2015, Lincoln Company hires seven individuals who are certified to be members of a qualifying targeted group. Each employee works in excess of 600 hours and is paid wages of $7,500 during the y...

Q: Janda and Kelsey contributed $1 million each to the JKL LLC

Janda and Kelsey contributed $1 million each to the JKL LLC in exchange for 45% capital and profits interests in the entity. Lilli will contribute no cash, but has agreed to manage the LLC’s business...

Q: BlueCo, a domestic corporation, incorporates GreenCo, a new wholly

BlueCo, a domestic corporation, incorporates GreenCo, a new wholly owned entity in Germany. Under both German and U.S. legal principles, this entity is a corporation. BlueCo faces a 35% U.S. tax rate....

Q: Chock, a U.S. corporation, purchases inventory for

Chock, a U.S. corporation, purchases inventory for resale from distributors within the United States and resells this inventory at a $1 million profit to customers outside the United States. Title to...