Question: What are some ways you might approach

> Dexter owns a large tract of land and subdivides it for sale. Assume that Dexter meets all of the requirements of § 1237 and during the tax year sells the first eight lots to eight different buyers for $22,000 each. Dexter’s basis in each lot sold is $15

> In a § 1031 like-kind exchange, Rafael exchanges equipment that originally cost $200,000. On the date of the exchange, the equipment given up has an adjusted basis of $85,000 and a fair market value of $110,000. Rafael pays $15,000 and receives equipment

> Larry is the sole proprietor of a trampoline shop. During 2015, the following transactions occurred. • Unimproved land adjacent to the store was condemned by the city on February 1. The condemnation proceeds were $15,000. The land, acquired in 1986, had

> On December 1, 2013, Lavender Manufacturing Company (a corporation) purchased another company’s assets, including a patent. The patent was used in Lavender’s manufacturing operations; $49,500 was allocated to the patent, and it was amortized at the rate

> Siena Industries (a sole proprietorship) sold three § 1231 assets on October 10, 2015. Data on these property dispositions are as follows. a. Determine the amount and the character of the recognized gain or loss from the disposition of ea

> Delphinium Company owns two parcels of land (§ 1231 assets). One parcel can be sold at a loss of $60,000, and the other parcel can be sold at a gain of $70,000. The company has no nonrecaptured § 1231 losses from prior years. The parcels could be sold at

> Geranium, Inc., has the following net § 1231 results for each of the years shown. What is the nature of the net gain in 2014 and 2015? Tax Year Net 5 1231 Loss Net 5 1231 Gain 2010 $18,000 2011 33,000 2012 42,000 2013 $41,000 2014 30,000

> Harold, a CPA, has a new client who recently moved to town. Harold pre- pares the client’s current-year tax return, which shows a net § 1231 gain. Harold calls the client to request copies of the returns for the preceding five years to determine if there

> A sculpture that Tulip & Co. held for investment was destroyed in a flood. The sculpture was insured, and Tulip had a $60,000 gain from this casualty. It also had a $17,000 loss from an uninsured antique vase that was destroyed by the flood. The vase was

> Two years ago, Harriet Company (an unincorporated entity) developed a process for preserving doughnuts that gives the doughnuts a much longer shelf life. The process is not patented or copyrighted, and only Harriet knows how it works. A conglomerate has

> Ridge is a generous individual. During the year, he made interest-free loans to various family members when the Federal interest rate was 3%. What are the Federal tax consequences of the following loans by Ridge? a. On June 30, Ridge loaned $12,000 to

> Bridgette is known as the “doll lady.” She started collecting dolls as a child, always received one or more dolls as gifts on her birthday, never sold any dolls, and eventually owned 600 dolls. She is retiring and moving to a small apartment and has deci

> In 2015, Bertha Jarow (head of household with three dependents) had a $28,000 loss from the sale of a personal residence. She also purchased from an individual inventor for $7,000 (and resold in two months for $18,000) a patent on a rubber bonding proces

> The taxpayer is an antiques collector and is going to sell an antique purchased many years ago for a large gain. The facts and circumstances indicate that the taxpayer might be classified as a dealer rather than an investor in antiques. The taxpayer will

> Platinum, Inc., has determined its taxable income as $215,000 before considering the results of its capital gain or loss transactions. Platinum has a short- term capital loss of $24,000, a long-term capital loss of $38,000, and a short-term capital gain

> Sally has taxable income of $160,000 as of November 30 of this year. She wants to sell a Rodin sculpture that has appreciated $90,000 since she purchased it six years ago, but she does not want to pay more than $15,000 of additional tax on the transactio

> Elaine Case (single with no dependents) has the following transactions in 2015: AGI (exclusive of capital gains and losses) $240,000 Long-term capital gain ………………………………………. 22,000 Long-term capital loss ………………………………………. (8,000) Short-term capital gain

> Thrasher Corporation sells short 100 shares of ARC stock at $20 per share on January 15, 2015. It buys 200 shares of ARC stock on April 1, 2015, at $25 per share. On May 2, 2015, Thrasher closes the short sale by delivering 100 of the shares purchased on

> Maria held vacant land that qualified as an investment asset. She purchased the vacant land on April 10, 2011. She exchanged the vacant land for a rental house in a qualifying like-kind exchange on January 22, 2015. Maria was going to hold the house for

> Freys, Inc., sells a 12-year franchise to Red Company. The franchise contains many restrictions on how Red may operate its store. For instance, Red cannot use less than Grade 10 Idaho potatoes; must fry the potatoes at a constant 410 degrees; must dress

> Blue Corporation and Fuchsia Corporation are engaged in a contract negotiation over the use of Blue’s trademarked name, DateSiteForSeniors. For a one- time payment of $45,000, Blue licensed Fuchsia to use the name DateSiteForSeniors, and the license requ

> Brad is the president of the Yellow Corporation. He and other members of his family control the corporation. Brad has a temporary need for $50,000, and the corporation has excess cash. He could borrow the money from a bank at 9%, and Yellow is earning 6%

> Mac, an inventor, obtained a patent on a chemical process to clean old aluminum siding so that it can be easily repainted. Mac has a $50,000 tax basis in the patent. Mac does not have the capital to begin manufacturing and selling this product, so he has

> Carla was the owner of vacant land that she was holding for investment. She paid $2 million for the land in 2013. Raymond was an investor in vacant land. He thought Carla’s land might be the site of an exit ramp from a new freeway. Raymond gave Carla $83

> Benny purchased $400,000 of Peach Corporation face value bonds for $320,000 on November 13, 2014. The bonds had been issued with $80,000 of original issue discount because Peach was in financial difficulty in 2014. On December 3, 2015, Benny sold the bon

> Eagle Partners meets all of the requirements of § 1237 (subdivided realty). In 2015, Eagle Partners begins selling lots and sells four separate lots to four dif- ferent purchasers. Eagle Partners also sells two contiguous lots to another purchaser. The s

> Hyacinth, Inc., is a dealer in securities. The firm has spotted a fast-rising company and would like to buy and hold its stock for investment. The stock is currently selling for $2 per share, and Hyacinth thinks it will climb to $40 a share within two ye

> George is the owner of numerous classic automobiles. His intention is to hold the automobiles until they increase in value and then sell them. He rents the automobiles for use in various events (e.g., antique automobile shows) while he is holding them. I

> Rennie owns a video game arcade. He buys vintage video games from estates, often at much less than the retail value of the property. He usually installs the vintage video games in a special section of his video game arcade that appeals to players of “cla

> During the year, Eugene had the four property transactions summarized below. Eugene is a collector of antique glassware and occasionally sells a piece to get funds to buy another. What are the amount and nature of the gain or loss from each of these tran

> Alison owns a painting that she received as a gift from her aunt 10 years ago. The aunt created the painting. Alison has displayed the painting in her home and has never attempted to sell it. Recently, a visitor noticed the painting and offered Alison $5

> An individual taxpayer sells some used assets at a garage sale. Why are none of the proceeds taxable in most situations?

> Roy decides to buy a personal residence, and he goes to the bank for a $150,000 loan. The bank tells Roy that he can borrow the funds at 4% if his father will guarantee the debt. Roy’s father, Hal, owns a $150,000 CD currently yielding 3.5%. The Federal

> Nicholas owns business equipment with a $155,000 adjusted basis; he paid $200,000 for the equipment, and it is currently worth $173,000. Nicholas dies suddenly, and his son Alvin inherits the property. What is Alvin’s basis for the property? What happens

> Gaston Corporation distributes § 1245 property as a dividend to its share- holders. The property’s fair market value is $580,000, and the adjusted basis is $560,000. In addition, the amount of the recapture potential is $55,000. What is the amount and ch

> An apartment building was acquired in 2006. The depreciation taken on the building was $123,000, and the building was sold for a $34,000 gain. What is the maximum amount of 25% gain?

> Jacob purchased business equipment for $56,000 in 2012 and has taken $35,000 of regular MACRS depreciation. Jacob sells the equipment in 2015 for $26,000. What is the amount and character of Jacob’s gain or loss?

> Olivia wants to buy some vacant land for investment purposes. She currently cannot afford the full purchase price. Instead, Olivia pays the landowner $8,000 to obtain an option to buy the land for $175,000 anytime in the next four years. Fourteen months

> Shelia purchases $50,000 of newly issued Gingo Corporation bonds for $45,000. The bonds have original issue discount (OID) of $5,000. After Sheila amortized $2,300 of OID and held the bonds for four years, she sold the bonds for $48,000. What is the amou

> Dexter owns a large tract of land and subdivides it for sale. Assume that Dexter meets all of the requirements of § 1237 and during the tax year sells the first eight lots to eight different buyers for $22,000 each. Dexter’s basis in each lot sold is $15

> Camilo’s property, with an adjusted basis of $155,000, is condemned by the state. Camilo receives property with a fair market value of $180,000 as compensation for the property taken. a. What is Camilo’s realized and recognized gain? b. What is the

> Logan and Johnathan exchange land, and the exchange qualifies as like kind under § 1031. Because Logan’s land (adjusted basis of $85,000) is worth $100,000 and Johnathan’s land has a fair market value of $80,000, Johnathan also gives Logan cash of $20,00

> Peyton sells an office building and the associated land on May 1, 2015. Under the terms of the sales contract, Peyton is to receive $1,600,000 in cash. The purchaser is to assume Peyton’s mortgage of $950,000 on the property. To enable the purchaser to o

> Alva received dividends on her stocks as follows. Amur Corporation (a French corporation whose stock is traded on an established U.S. securities market) $60,000 Blaze, Inc., a Delaware corporation 40,000 Grape, Inc., a Virginia corporation 22,000 a. Al

> Lefty completes the following capital asset transactions. Compute Lefty’s recognized capital gain or loss from these transactions. Long-term gain……….$10,000 Short-term gain……….4,000 Short-term loss……….25,000

> What is guerrilla marketing? What is ambient advertising?

> What is the purpose of public relations? What is a crisis management plan? Describe some of the activities that are part of PR.

> Why is follow-up after the sale so important in relationship selling?

> What is the objective of the sales presentation? How might you overcome buyer objections?

> What is prospecting? What does it mean to qualify the prospect? What is the preapproach? Why are these steps in the creative selling process that occur before you ever contact the buyer so important to the sale?

> What is relationship selling? How does it differ from transactional selling?

> Describe the various types of sales jobs.

> Define retailing. What is the role of retailing in today’s world?

> What role does personal selling play within the marketing function?

> What is m-commerce?

> What is direct marketing? Describe the more popular types of direct marketing.

> What is social media? What are social networks? Describe Facebook, Twitter, virtual worlds, product review sites, mobile apps, and location-based social networks.

> What is viral marketing? How do marketers use brand ambassador or brand evangelists?

> What are some ethical problems in buzz marketing?

> What is buzz? How do marketers practice buzz building?

> A woman sued Taco Bell for deceptive advertising, claiming its tacos had far less beef than advertised. Taco Bell, understanding the potential damage to its brand, immediately went on the defense and filed a countersuit. In addition, Taco Bell’s CEO post

> In this chapter, we learned that marketers are increasing their use of social media in their marketing communication strategies. Why is this happening? What are some ways a university can use social media in their marketing communication programs? How do

> You learned that media planners use a variety of metrics to help in making decisions on what TV show or which magazines to include in their media plans. Two of these are gross rating points (GRPs) and cost per thousand (CPM). Assume you are developing a

> When you're already big it can be hard to get bigger. That’s why Alibaba is working hard 10 continued to expand its e-tailing empire. In 1999, Jack Ma, inspired by a trip to the U.S. where he first encountered the Internet, led a group of 17 friends to f

> What is sales promotion? Explain some of the different types of consumer sales promotions marketers frequently use.

> What is media planning? How do media planners use reach, frequency, gross rating points, and cost per thousand in developing effective media schedules?

> How do marketers pretest their ads? How do they post-test ads?

> What are different types of branded content? How do marketers use branded entertainment and support media, such as directories, out-of-home media, and place-based media, to communicate with consumers?

> What is digital media? What are owned, paid, and earned media? What are the different advertising activities or techniques included in website advertising, mobile advertising, and video sharing?

> Describe the steps in developing an advertising campaign. What is a creative brief? What is meant by the appeal, execution format, tonality, and creative tactics used in an ad campaign?

> What are some of the major criticisms of advertising? What is corrective advertising? What is puffery?

> What is consumer-generated advertising and why is it growing in importance? What is crowdsourcing and how is it used in advertising?

> Firms may seek the help of full-service or limited-service advertising agencies for their advertising. Describe each.

> Describe push versus pull strategies. What is advertising, and what types of advertising do marketers use most often? What is an advertising campaign?

> Explain some of the different types of trade sales promotions marketers frequently use.

> Describe the major ways in which firms develop marketing communication budgets.

> Explain the hierarchy of effects and how it is used in communication objectives.

> List and explain the steps in promotion planning.

> List the elements of the promotion mix and describe how they are used to deliver personal and mass appeals.

> Describe the traditional communication model.

> What is promotion? What is integrated marketing communication? What are multichannel promotional strategies?

> You learned that media planners use a variety of metrics to help in making decisions on what TV show or which magazines to include in their media plans. Two of these are gross rating points (GRPs) and cost per thousand (CPM). Assume you are developing a

> As a soon-to-be college graduate, you be will be looking for a full-time job in your field. As part of this process, you will need to learn to successfully market yourself. Prepare an outline for your marketing plan. First, list the special problems and

> Because of increased competition in its community, you have been hired as a marketing consultant by a local restaurant. You know that the characteristics of services (intangibility, perishability, variability, and inseparability) create unique marketing

> What do we mean by marketing people? Marketing places? Marketing ideas?

> Address the same issues in item 12-22 for a marketing plan for the town or city where your college is located. How would you market this town or city and the surrounding area as part of the overall college experience to potential students?

> Companies track a wide range of metrics within the supply chain area. Some of the most common ones are the following: • On-time delivery • Accuracy of forecasted inventory needs • Returns processing cost as a percentage of product revenue • Customer orde

> The supply chain concept looks at both the inputs of a firm and the firms that facilitate the movement of the product from the manufacturer to the consumer. Do you think marketers should be concerned with the total supply chain concept? Why or why not?

> RFID tags are extremely useful for retailers, but many consumers have responded negatively to them, even calling them “spy chips.” What are the ethical issues that retailers must be aware of when they use these chips? What responsibility do retailers hav

> Can a company’s reverse logistics system have a significant influence on how a consumer views the organization and its brand? Are there specific types of products for which a company’s reverse logistics system could play a more important role in contribu

> As colleges and universities are looking for better ways to satisfy their customers, an area of increasing interest is the distribution of their product (which of course is a student’s education). Describe the characteristics of your school’s channel(s)

> Pizza is big business. Americans spend over $40 billion on pizza every year. With more than 59,000 U.S. stores that sell and deliver pizza, customers have lots of options from which to choose. Dominos wants more and more of them to make Domino's their on

> As the one-person marketing department for a candy manufacturer (your firm makes high-quality, hand-dipped chocolates using only natural ingredients), you are considering making changes in your distribution strategy. Your products have previously been so

> To bring cost-effective products to your door, retailers like Walmart use suppliers, some of which may contract work out to other suppliers and so on. And while the initial suppliers that Walmart contracts with may be socially responsible, not all suppli

> When can offering too many choices become too much to handle? Target has gone through a period of bad press as a result of an unacceptable level of stock-outs that upset customers and decreased sales. The discount retailer believes that it can solve the

> What are the advantages and disadvantages of shipping by rail? By air? By ship? By truck?

> What is logistics? Explain the functions of logistics. What is reverse logistics?

> Explain the steps in distribution planning.

> Explain intensive, exclusive, and selective forms of distribution.

> What are conventional, vertical, and horizontal marketing systems?