Questions from General Taxation

Q: Homely Corporation operates a fleet of oceangoing cargo vessels. During the

Homely Corporation operates a fleet of oceangoing cargo vessels. During the year, one Homely vessel was docked at its home port in New Orleans for 55 days, was on the high seas for 120 days, and was d...

Q: Funk Corporation conducts business in a foreign jurisdiction that imposes a 1

Funk Corporation conducts business in a foreign jurisdiction that imposes a 1 percent tax on gross receipts from sales within the jurisdiction. This year, Funk paid $750,000 gross receipts tax to the...

Q: Lincoln manufactures paper products in the United States and sells the products

Lincoln manufactures paper products in the United States and sells the products internationally. Because most of its foreign sales are in hightax jurisdictions, Lincoln has excess foreign credits from...

Q: Hastings Corporation has a foreign subsidiary conducting a manufacturing business in Country

Hastings Corporation has a foreign subsidiary conducting a manufacturing business in Country Z, which has a 15 percent corporate income tax. The IRS recently challenged the transfer price at which Has...

Q: LSG Company is a calendar year, cash basis taxpayer. On

LSG Company is a calendar year, cash basis taxpayer. On November 1, 2019, LSG paid $9,450 cash to the janitorial service firm that cleans LSG’s administrative offices and retail stores. How much of th...

Q: Mr. Leonard died on April 16. Mr. and Mrs

Mr. Leonard died on April 16. Mr. and Mrs. Leonard had been married for 11 years and had always filed a joint return. Mrs. Leonard remarried on December 21.

Q: During the first eight months of the year, Ms. Layne

During the first eight months of the year, Ms. Layne was self-employed and earned $63,200 net income. In September, she accepted a job with MW Company and earned $75,000 salary through the end of the...

Q: Mr. and Mrs. Marceleno own a sole proprietorship that generates

Mr. and Mrs. Marceleno own a sole proprietorship that generates approximately $60,000 annual net profit. This business is the couple’s only source of income. In April, June, and September, they paid t...

Q: In November, Mr. Kurk discovered that his combined income tax

In November, Mr. Kurk discovered that his combined income tax withholding and estimated tax payments would be less than his prior year tax and, therefore, would not be a safe-harbor estimate. He immed...

Q: Mr. and Mrs. Johnson were married in 2001. This

Mr. and Mrs. Johnson were married in 2001. This year they traveled to Reno, Nevada, immediately after Christmas and obtained a divorce on December 29. They spent two weeks vacationing in California, r...