Questions from Individual Taxation

Q: After several years of profitable operations, Javell, the sole shareholder

After several years of profitable operations, Javell, the sole shareholder of JBD Inc., a C corporation, sold 22 percent of her JBD stock to ZNO Inc., a C corporation in a similar industry. During the...

Q: Is it possible for a taxpayer to have more than one loan

Is it possible for a taxpayer to have more than one loan that is treated as acquisition indebtedness for tax purposes? Explain.

Q: Mackenzie is considering conducting her business, Mac561, as either a

Mackenzie is considering conducting her business, Mac561, as either a single member LLC or as an S corporation. Determine Mackenzie’s after-tax cash flow from the entity’s business income and any comp...

Q: Danni is a single 30 percent owner of Kolt (a business

Danni is a single 30 percent owner of Kolt (a business entity). In the current year, Kolt reported a $1,000,000 business loss. Answer the following questions associated with each of the following alte...

Q: ATW corporation currently uses the FIFO method of accounting for its inventory

ATW corporation currently uses the FIFO method of accounting for its inventory for book and tax purposes. Its beginning inventory for the current year was $8,000,000. Its ending inventory for the curr...

Q: ELS corporation is about to begin its sixth year of existence.

ELS corporation is about to begin its sixth year of existence. Assume that ELS reported gross receipts for each of its first five years of existence for scenarios A, B, and C as follows: Year of Exis...

Q: Assume that in 2018 Hill Corporation reported a net operating loss of

Assume that in 2018 Hill Corporation reported a net operating loss of $10,000 that it carried forward to year 2019. In 2018, Hill also reported a net capital loss of $3,000 that it carried forward to...

Q: Chandler Corporation reported pretax book income of $2,000,

Chandler Corporation reported pretax book income of $2,000,000. Tax depreciation exceeded book depreciation by $500,000. During the year the Company capitalized $250,000 into ending inventory under §2...

Q: Shaw Corporation reported pretax book income of $1,000,

Shaw Corporation reported pretax book income of $1,000,000. Included in the computation were favorable temporary differences of $200,000, unfavorable temporary differences of $50,000, and favorable pe...

Q: Shaw, Inc. reported pretax book income of $10,

Shaw, Inc. reported pretax book income of $10,000,000. During the current year, the reserve for bad debts increased by $100,000. In addition, tax depreciation exceeded book depreciation by $200,000. S...