Questions from Taxation

Q: Ms. Kaspari, who has a 24 percent marginal tax rate

Ms. Kaspari, who has a 24 percent marginal tax rate on ordinary income, acquired the following blocks of stock in KDS, a closely held corporation. July 12, 2003 …………………….1,400 shares at $41 per share...

Q: As of November 30, Ms. Brett had $12,

As of November 30, Ms. Brett had $12,000 capital losses and no capital gains. She owns 4,900 shares of GG stock with a $15 basis and a $45 FMV per share. Ms. Brett plans to hold her stock for three mo...

Q: Mr. and Mrs. Prinze are evaluating an investment in undeveloped

Mr. and Mrs. Prinze are evaluating an investment in undeveloped land. The year 0 cost is $100,000, and they can borrow $60,000 of the purchase price at 8 percent. They will pay interest only in years...

Q: Ms. Barstow purchased a limited interest in Quinnel Partnership in 2018

Ms. Barstow purchased a limited interest in Quinnel Partnership in 2018. Her share of the partnership’s 2018 business loss was $5,000. Unfortunately, Ms. Barstow couldn’t deduct this loss because she...

Q: The management of WP Company must decide between locating a new branch

The management of WP Company must decide between locating a new branch office in foreign Jurisdiction F or foreign Jurisdiction G. Regardless of location, the branch operation will use tangible proper...

Q: Mr. and Mrs. J own a dry cleaning business that

Mr. and Mrs. J own a dry cleaning business that generates $125,000 taxable income each year. For the past few years, the couple’s federal tax rate on this income has been 32 percent. Congress recently...

Q: Company N, an accrual basis taxpayer, owes $90,

Company N, an accrual basis taxpayer, owes $90,000 to Creditor K. At the end of 2017, Company N accrued $7,740 interest payable on this debt. It didn’t pay this liability until March 3, 2018. Both Com...

Q: KTR Company earns a $10 profit on each unit of manufactured

KTR Company earns a $10 profit on each unit of manufactured goods, and it sells 20 million units each year. KTR’s income tax rate is 20 percent. However, the jurisdiction in which KTR operates just in...

Q: Jurisdiction B’s tax system consists of a 6.5 percent general

Jurisdiction B’s tax system consists of a 6.5 percent general sales tax on retail goods and selected services. Over the past decade, the average annual volume of sales subject to this tax was $500 mil...

Q: Find and provide a citation for the IRC section that defines taxable

Find and provide a citation for the IRC section that defines taxable income. Be precise in your reference [e.g., Section 61(a)(1), not Section 61]