Questions from Individual Taxation

Q: What stock ownership tests must be met before a shareholder receives exchange

What stock ownership tests must be met before a shareholder receives exchange treatment under the substantially disproportionate change-in-stock-ownership test in a stock redemption? Why is a change i...

Q: Hoki Poki, a cash-method general partnership, recorded the

Hoki Poki, a cash-method general partnership, recorded the following items for its current tax year: Rental real estate income…………………………………………………………………………..$2,000 Sales revenue………………………………………………………………...

Q: On the last day of its current tax year, Buy Rite

On the last day of its current tax year, Buy Rite LLC received $300,000 when it sold a machine it had purchased for $200,000 three years ago to use in its business. At the time of the sale, the basis...

Q: Jhumpa, Stewart, and Kelly are all one-third partners

Jhumpa, Stewart, and Kelly are all one-third partners in the capital and profits of Firewalker general partnership. In addition to their normal share of the partnership’s annual income, Jhumpa and Ste...

Q: This year, Darrel’s distributive share from Alcove Partnership includes $6

This year, Darrel’s distributive share from Alcove Partnership includes $6,000 of interest income, $3,000 of dividend income, and $70,000 ordinary business income. a. Assume that Darrel materially par...

Q: This year, Alex’s distributive share from Eden Lakes Partnership includes $

This year, Alex’s distributive share from Eden Lakes Partnership includes $8,000 of interest income, $4,000 of net long-term capital gains, $2,000 net section 1231 gain from the sale of property used...

Q: Lane and Cal each own 50 percent of the profits and capital

Lane and Cal each own 50 percent of the profits and capital of High Yield LLC. High Yield owns a portfolio of taxable bonds and municipal bonds, and each year the portfolio generates approximately $10...

Q: Carmine was allocated the following items from the Piccolo LLC for last

Carmine was allocated the following items from the Piccolo LLC for last year: Ordinary business loss Nondeductible penalties Tax-exempt interest income Short-term capital gain Cash distributions Rank...

Q: Oscar, Felix, and Marv are all one-third partners

Oscar, Felix, and Marv are all one-third partners in the capital and profits of Eastside general partnership. In addition to their normal share of the partnership’s annual income, Oscar and Felix rece...

Q: Pam, Sergei, and Mercedes are all one-third partners

Pam, Sergei, and Mercedes are all one-third partners in the capital and profits of Oak Grove General Partnership. Partnership debt is allocated among the partners in accordance with their capital and...