Questions from Taxation

Q: Eight years ago, SW purchased 1,000 shares of Delta

Eight years ago, SW purchased 1,000 shares of Delta stock. On May 20 of the current year, it sold these shares for $90 per share. In each of the following cases, compute SW’s recognized gain or loss o...

Q: Rufus Inc. and Hardy Company are negotiating a nontaxable exchange of

Rufus Inc. and Hardy Company are negotiating a nontaxable exchange of business properties. Rufus’s property has a $50,000 tax basis and a $77,500 FMV. Hardy’s property has a $60,000 tax basis and a $9...

Q: Refer to the facts in the preceding problem. In each case

Refer to the facts in the preceding problem. In each case in which SW purchased 1,200 Delta shares, compute its tax basis in the shares. Data from Problem 29: Eight years ago, SW purchased 1,000 sha...

Q: Ten years ago, Janine purchased 100 shares of Mega stock for

Ten years ago, Janine purchased 100 shares of Mega stock for $245 per share. On September 10 of the current year, she sold all 100 shares for $200 per share. a. Compute Janine’s realized and recognize...

Q: Watson, a calendar year corporation, reported $1,250

Watson, a calendar year corporation, reported $1,250,000 net income before tax on its financial statements prepared in accordance with GAAP. During the year, Watson exchanged one piece of commercial r...

Q: KAI, a calendar year corporation, reported $500,000

KAI, a calendar year corporation, reported $500,000 net income before tax on its financial statements prepared in accordance with GAAP. The corporation’s records reveal the following information: KAI...

Q: Alfix, a calendar year corporation, reported $789,300

Alfix, a calendar year corporation, reported $789,300 net income before tax on its financial statements prepared in accordance with GAAP. The corporation’s records reveal the following information: De...

Q: Firm A exchanged an old asset with a $20,000

Firm A exchanged an old asset with a $20,000 tax basis for a new asset with a $32,000 FMV. Under each of the following assumptions, apply the generic rules to compute A’s realized gain, recognized gai...

Q: Investor W has the opportunity to invest $500,000 in

Investor W has the opportunity to invest $500,000 in a new venture. The projected cash flows from the venture are as follows: Investor W uses a 7 percent discount rate to compute NPV. Determine if s...

Q: Firm Q exchanged old property with an $80,000 tax

Firm Q exchanged old property with an $80,000 tax basis for new property with a $65,000 FMV. Under each of the following assumptions, apply the generic rules to compute Q’s realized loss, recognized l...