Questions from Taxation


Q: Firm J sold marketable securities to Company B. Firm J’s tax

Firm J sold marketable securities to Company B. Firm J’s tax basis in the securities was $45,250. Compute Firm J’s recognized gain or loss if: a. The selling price was $60,000, and Firm J and Company...

See Answer

Q: Silo Inc. sold investment land to PPR Inc. for $

Silo Inc. sold investment land to PPR Inc. for $110,000 cash. Silo’s basis in the land was $145,000. Mr. and Mrs. J own 100 percent of the stock of both corporations. a. What is PPR’s tax basis in the...

See Answer

Q: Investor B has $100,000 in an investment paying 9

Investor B has $100,000 in an investment paying 9 percent taxable interest per annum. Each year B incurs $825 of expenses relating to this investment. Compute B’s annual net cash flow assuming the fol...

See Answer

Q: Firm J, an accrual basis taxpayer, recorded a $40

Firm J, an accrual basis taxpayer, recorded a $40,000 account receivable on the sale of an asset on credit. Its basis in the asset was $33,000. Two months after the asset sale, Firm J sold the receiva...

See Answer

Q: Four years ago, Firm RD paid $468,000 for

Four years ago, Firm RD paid $468,000 for 12 acres of undeveloped land. This year, the firm sold the land for $1 million. What is the character of RD’s $532,000 recognized gain under each of the follo...

See Answer

Q: Shenandoah Skies is the name of an oil painting by artist Kara

Shenandoah Skies is the name of an oil painting by artist Kara Lee. In each of the following cases, determine the amount and character of the taxpayer’s gain or loss on sale of the painting. a. The ta...

See Answer

Q: Several years ago, PTR purchased business equipment for $50,

Several years ago, PTR purchased business equipment for $50,000. PTR’s accumulated book depreciation with respect to the equipment is $37,200, and its accumulated tax depreciation is $41,000. a. Compu...

See Answer

Q: Koil Corporation generated $718,400 ordinary income from the sale

Koil Corporation generated $718,400 ordinary income from the sale of inventory to its customers. It also sold three non inventory assets during the year. Compute Koil’s taxable income assuming that: a...

See Answer

Q: This year, PRS Corporation generated $300,000 income from

This year, PRS Corporation generated $300,000 income from the performance of consulting services for its clients. It sold two assets during the year, recognizing a $36,000 gain on the first sale and a...

See Answer

Q: Alto Corporation sold two capital assets this year. The first sale

Alto Corporation sold two capital assets this year. The first sale resulted in a $13,000 capital gain, and the second sale resulted in a $41,000 capital loss. Alto was incorporated five years ago. Fou...

See Answer