Questions from Individual Taxation

Q: In the past several years, Shakira had loaned money to Shakira

In the past several years, Shakira had loaned money to Shakira Inc. (an S corporation) to help the corporation keep afloat in a downturn. Her stock basis in the S corporation is now zero, and she had...

Q: Adam Fleeman, a skilled carpenter, started a home improvement business

Adam Fleeman, a skilled carpenter, started a home improvement business with Tom Collins, a master plumber. Adam and Tom are concerned about the payroll taxes they will have to pay. Assume they form an...

Q: In what circumstances could a calendar-year C corporation make an

In what circumstances could a calendar-year C corporation make an election on February 1, year 1, to be taxed as an S corporation in year 1 but not have the election effective until year 2?

Q: Using the facts in problem 62, could Adam and Tom lower

Using the facts in problem 62, could Adam and Tom lower their payroll tax exposure if they operated their business as a partnership? Why or why not?

Q: Under what conditions will a partner recognize gain in a liquidating distribution

Under what conditions will a partner recognize gain in a liquidating distribution?

Q: Allison, Keesha, and Steven each own equal interests in KAS

Allison, Keesha, and Steven each own equal interests in KAS Partnership, a calendar year-end, cash-method entity. On January 1 of the current year, Steven’s basis in his partnership...

Q: This year, Justin B.’s share of S corporation income

This year, Justin B.’s share of S corporation income includes $4,000 of interest income, $5,000 of dividend income, and $40,000 of net income from the corporation’s professional service business activ...

Q: Friends Jackie (0.5 percent owner), Jermaine (1

Friends Jackie (0.5 percent owner), Jermaine (1 percent owner), Marlon (2 percent owner), Janet (86 percent owner), and Tito (10.5 percent owner) are shareholders in Jackson 5 Inc. (an S corporation)....

Q: Maple Corp., a calendar-year corporation, was formed three

Maple Corp., a calendar-year corporation, was formed three years ago by its sole shareholder, Brady, who immediately elected S corporation status. On December 31 of the current year, Maple distributed...

Q: Janna has a tax basis of $15,000 in her

Janna has a tax basis of $15,000 in her Mimikaki stock (Mimikaki has been an S corporation since inception). In 2016, Janna was allocated $20,000 of ordinary income from Mimikaki. What is the amount a...