Questions from Taxation

Q: Is the substituted basis of the qualifying property received in a nontaxable

Is the substituted basis of the qualifying property received in a nontaxable exchange more or less than the cost of that property?

Q: Firm Q, a real estate broker, exchanged 16 acres of

Firm Q, a real estate broker, exchanged 16 acres of land for a commercial warehouse owned by Company M. Company M, a light industrial business, plans to hold the land as a long-term investment. Is thi...

Q: Company W exchanged the following assets for Blackacre, investment land worth

Company W exchanged the following assets for Blackacre, investment land worth $2 million. Does Company W recognize any gain on this exchange?

Q: Under what conditions can the destruction of property by casualty or theft

Under what conditions can the destruction of property by casualty or theft result in an economic loss but a realized gain?

Q: Mrs. Liu owns a business as a sole proprietor. Near

Mrs. Liu owns a business as a sole proprietor. Near the end of her taxable year, she is evaluating a new opportunity that would generate $25,000 additional income for her business. What marginal tax r...

Q: Ryland Company, a calendar year taxpayer, purchased commercial realty for

Ryland Company, a calendar year taxpayer, purchased commercial realty for $2 million and allocated $200,000 cost to the land and $1.8 million cost to the building. Ryland placed the real estate in ser...

Q: This year, Mr. Pitt’s sole proprietorship generated a $17

This year, Mr. Pitt’s sole proprietorship generated a $17,000 net loss. Can Mr. Pitt use this loss as a net operating loss carry forward deduction?

Q: A local government imposed a new 2 percent tax on the gross

A local government imposed a new 2 percent tax on the gross receipts of businesses operating within its jurisdiction. XYZ Company, which manufactures soap and other toiletries, responded to the tax by...

Q: This year, Firm Q, a cash basis taxpayer, remitted

This year, Firm Q, a cash basis taxpayer, remitted $26,800 FICA payroll tax to the federal government. However, the firm deducted only $13,400 FICA tax on its income tax return. Can you explain this a...

Q: Define the tax base for the self-employment tax. When

Define the tax base for the self-employment tax. When do sole proprietors pay the self-employment tax to the federal government?