Questions from General Taxation

Q: Rochelle is a limited partner in Megawatt Partnership. For 2019,

Rochelle is a limited partner in Megawatt Partnership. For 2019, her schedule K-1 from the partnership reported the following share of partnership items. Ordinary income …………………………. $25,000 Section 1...

Q: Mr. Tillotson has not paid income tax or filed a tax

Mr. Tillotson has not paid income tax or filed a tax return for the last eight years. He believes that the IRS can no longer assess back taxes for the first five of those years.

Q: KP, a calendar year corporation, filed its 2015 return on

KP, a calendar year corporation, filed its 2015 return on May 1, 2016. On February 19, 2019, it filed an amended 2015 return reflecting $2.61 million less taxable income than the original return and r...

Q: Mr. Barlow, a self-employed consultant, charged a

Mr. Barlow, a self-employed consultant, charged a client a $15,000 fee plus $3,900 reimbursable business expenses. The client paid the $18,900 bill and sent a Form 1099 reporting $18,900 income. When...

Q: Mrs. Luce died on February 12 and left her entire estate

Mrs. Luce died on February 12 and left her entire estate (including her marketable securities) to her son. After the end of the year, the son received 14 Form 1099s showing his mother’s name and Socia...

Q: Mr. Martinez died and left all his property to his only

Mr. Martinez died and left all his property to his only grandson. After the estate was settled, the grandson received his $942,000 inheritance. Nine months later, the IRS audited Mr. Martinez’s final...

Q: A local government levies an annual real property tax on the personal

A local government levies an annual real property tax on the personal residence located at 123 Maple Drive. This tax is assessed on a calendar-year basis, and the homeowner must pay the tax before Dec...

Q: Firtex Company operates in a jurisdiction that levies real property tax but

Firtex Company operates in a jurisdiction that levies real property tax but no personal property tax. This year, the company spent $6 million to add an exterior lighting system and security fences to...

Q: Bailey Company, which has offices in six states, owns an

Bailey Company, which has offices in six states, owns an airplane that company executives use to travel from office to office. When the plane is not in use, it is stored in a hangar located in a juris...

Q: For the past 22 years, Mrs. Otis contributed part of

For the past 22 years, Mrs. Otis contributed part of her salary to a retirement plan sponsored by her corporate employer. Under federal law, Mrs. Otis did not pay tax on the income she contributed. Sh...