Questions from Individual Taxation

Q: Julio and Milania are owners of Falcons Corporation, an S corporation

Julio and Milania are owners of Falcons Corporation, an S corporation. They each own 50 percent of Falcons Corporation. In year 1, Julio and Milania each received distributions of $15,000 from Falcons...

Q: Many years ago James and Sergio purchased property for $450,

Many years ago James and Sergio purchased property for $450,000. Although they are listed as equal co-owners, Sergio was able to provide only $200,000 of the purchase price. James treated the addition...

Q: USCo owns 100 percent of the following corporations: Dutch N.

USCo owns 100 percent of the following corporations: Dutch N.V., Germany A.G., Australia PLC, Japan Corporation, and Brazil S.A. During the year, the following transactions took place. Determine wheth...

Q: Willie purchased a whole-life insurance policy on his brother,

Willie purchased a whole-life insurance policy on his brother, Benny. Under the policy, the insurance company will pay the named beneficiary $100,000 upon the death of the insured, Benny. Willie names...

Q: Jimmy owns two parcels of real estate, Tara and Sundance.

Jimmy owns two parcels of real estate, Tara and Sundance. Tara is worth $240,000 and Sundance is worth $360,000. Jimmy plans to bequeath Tara directly to his wife Lois and leave her a life estate in S...

Q: Chapeau Company, a U.S. corporation, operates through

Chapeau Company, a U.S. corporation, operates through a branch in Champagnia. The source rules used by Champagnia are identical to those used by the United States. For 2016, Chapeau has $2,000 of gros...

Q: Roland had a taxable estate of $5.5 million when

Roland had a taxable estate of $5.5 million when he died this year. Calculate the amount of estate tax due (if any) under the following alternatives. a. Roland’s prior taxable gifts consist of a taxab...

Q: Brad and Angelina are a wealthy couple who have three children,

Brad and Angelina are a wealthy couple who have three children, Fred, Bridget, and Lisa. Two of the three children, Fred and Bridget, are from Brad’s previous marriages. On Christmas this year Brad ga...

Q: Jones is seriously ill and has $6 million of property that

Jones is seriously ill and has $6 million of property that he wants to leave to his four children. He is considering making a current gift of the property (rather than leaving the property to pass thr...

Q: Angelina gave a parcel of realty to Julie valued at $210

Angelina gave a parcel of realty to Julie valued at $210,000 (Angelina purchased the property five years ago for $88,000). Compute the amount of the taxable gift on the transfer, if any. Suppose sever...