Questions from Taxation

Q: Refer to the facts in the preceding problem, but assume that

Refer to the facts in the preceding problem, but assume that ML exchanged the residential rental property for the 20 acres of investment land plus $22,000 (i.e., ML received cash in the exchange). a....

Q: Firm M exchanged an old asset with a $9,100

Firm M exchanged an old asset with a $9,100 tax basis and a $21,000 FMV for a new asset worth $18,500 and $2,500 cash. a. If the exchange is nontaxable, compute Firm M’s realized and recognized gain a...

Q: Northwest Company has average gross receipts of $50 million annually.

Northwest Company has average gross receipts of $50 million annually. This year, Northwest incurred $10.5 million of net business interest and has adjusted taxable income of $29 million. Compute North...

Q: Refer to the facts in the preceding problem. Three years after

Refer to the facts in the preceding problem. Three years after the exchange, Neil sold the investment asset for $1 million cash. a. Compute Neil’s book gain and tax gain on sale assuming Neil acquired...

Q: Amit is a partner in Reynolds Partnership. This year, Amit’s

Amit is a partner in Reynolds Partnership. This year, Amit’s Schedule K-1 from Reynolds reflected $50,000 of ordinary income, $1,000 of interest income, and a cash distribution of $35,000. Amit’s marg...

Q: Kari is a partner in Lizard Partnership. This year, Kari’s

Kari is a partner in Lizard Partnership. This year, Kari’s share of partnership ordinary income is $20,000, and she received a cash distribution of $30,000. Kari’s tax basis in her partnership interes...

Q: Refer to the facts in part c of the preceding problem.

Refer to the facts in part c of the preceding problem. In 2019, BLS repaid its $8,000 debt to Leo before he restored any basis in the debt. How much gain or loss, if any, will Leo recognize as a resul...

Q: Mr. Williams is employed by BDF Inc. Compute BDF’s 2018

Mr. Williams is employed by BDF Inc. Compute BDF’s 2018 employer payroll tax with respect to Mr. Williams assuming that: a. His annual compensation is $60,000. b. His annual compensation is $200,000....

Q: Refer to the facts in the preceding problem. Assume that in

Refer to the facts in the preceding problem. Assume that in the year 2019, the Social Security base amount increases to $131,000. Compute BDF’s 2019 employer payroll tax with respect to Mr. Williams a...

Q: For 2018, Ms. Deming earned wages totaling $225,

For 2018, Ms. Deming earned wages totaling $225,000. Calculate any .9 percent additional Medicare tax owed, assuming that: a. Ms. Deming is single. b. Ms. Deming files a joint return with her husband...