Questions from Individual Taxation

Q: Shimmer Inc. is a calendar-year end, accrual-

Shimmer Inc. is a calendar-year end, accrual-method corporation. This year, it sells the following long-term assets: Shimmer does not sell any other assets during the year and its taxable income befor...

Q: Pratt is ready to graduate and leave College Park. His future

Pratt is ready to graduate and leave College Park. His future employer offers the following four compensation packages from which Pratt may choose. Pratt will start working for Ferndale on January 1,...

Q: Ken sold a rental property for $500,000. He

Ken sold a rental property for $500,000. He received $100,000 in the current year and $100,000 each year for the next four years. $400,000 of the sales price was allocated to the building and the rema...

Q: Aruna, a sole proprietor, wants to sell two assets that

Aruna, a sole proprietor, wants to sell two assets that she no longer needs for her business. Both assets qualify as §1231 assets. The first is machinery and will generate a $10,000 §1231 loss on the...

Q: Hillary is in the leasing business and faces a marginal tax rate

Hillary is in the leasing business and faces a marginal tax rate of 35 percent. She has leased equipment to Whitewater Corporation for several years. Hillary bought the equipment for $50,000 and claim...

Q: Deirdre sold 100 shares of stock to her brother, James,

Deirdre sold 100 shares of stock to her brother, James, for $2,400. Deirdre purchased the stock several years ago for $3,000. a. What gain or loss does Deirdre recognize on the sale? b. What amount o...

Q: Two years ago, Bethesda Corporation bought a delivery truck for $

Two years ago, Bethesda Corporation bought a delivery truck for $30,000 (not subject to the luxury auto depreciation limits). Bethesda used MACRS 200 percent declining balance and the half-year conven...

Q: Hauswirth Corporation sold (or exchanged) some manufacturing equipment in year

Hauswirth Corporation sold (or exchanged) some manufacturing equipment in year 0. Hauswirth bought the machinery several years ago for $65,000 and it has claimed $23,000 of depreciation expense agains...

Q: Fontenot Corporation sold some machinery to its majority owner Gray (an

Fontenot Corporation sold some machinery to its majority owner Gray (an individual who owns 60 percent of Fontenot). Fontenot purchased the machinery for $100,000 and has claimed a total of $40,000 of...

Q: Moab, Inc. manufactures and distributes high-tech biking gadgets

Moab, Inc. manufactures and distributes high-tech biking gadgets. It has decided to streamline some of its operations so that it will be able to be more productive and efficient. Because of this decis...