Without regard to any extensions of time to file, when is the income tax return due for a corporation with a May 31 year-end? An August 31 year-end? A February 28 year-end?
> Despite a decade of subsidies and considerable success in Denmark, Germany, and Britain, renewable energy in the U.S. accounts for only 7 to 8 percent of total energy consumption. Hydroelectric power remains the most successful source of renewable energy
> Despite a decade of subsidies and considerable success in Denmark, Germany, and Britain, renewable energy in the U.S. accounts for only 7 to 8 percent of total energy consumption. Hydroelectric power remains the most successful source of renewable energy
> Despite a decade of subsidies and considerable success in Denmark, Germany, and Britain, renewable energy in the U.S. accounts for only 7 to 8 percent of total energy consumption. Hydroelectric power remains the most successful source of renewable energy
> Airlines face highly cyclical demand; American reported profitability in the strong expansion of 2006–2007 but massive losses in the severe recession of 2008–2009. Demand also fluctuates day to day. One of the ways American copes with random demand is th
> Airlines face highly cyclical demand; American reported profitability in the strong expansion of 2006–2007 but massive losses in the severe recession of 2008–2009. Demand also fluctuates day to day. One of the ways American copes with random demand is th
> Specific Electric Co. asks you to implement a pay-for-performance incentive contract for its new CEO and four EVPs on the Executive Committee. The five managers can either work really hard with 70 hour weeks at a personal opportunity cost of $200,000 in
> Airlines face highly cyclical demand; American reported profitability in the strong expansion of 2006–2007 but massive losses in the severe recession of 2008–2009. Demand also fluctuates day to day. One of the ways American copes with random demand is th
> The setting is a Ralph Lauren outlet store, and the product line is Polo golf shirts. A product manager and the General Manager for Outlet Sales are analyzing the discounted price to be offered at the outlet stores. Let’s work through t
> The setting is a Ralph Lauren outlet store, and the product line is Polo golf shirts. A product manager and the General Manager for Outlet Sales are analyzing the discounted price to be offered at the outlet stores. Let’s work through t
> The setting is a Ralph Lauren outlet store, and the product line is Polo golf shirts. A product manager and the General Manager for Outlet Sales are analyzing the discounted price to be offered at the outlet stores. Let’s work through t
> The setting is a Ralph Lauren outlet store, and the product line is Polo golf shirts. A product manager and the General Manager for Outlet Sales are analyzing the discounted price to be offered at the outlet stores. Let’s work through t
> The setting is a Ralph Lauren outlet store, and the product line is Polo golf shirts. A product manager and the General Manager for Outlet Sales are analyzing the discounted price to be offered at the outlet stores. Let’s work through t
> The setting is a Ralph Lauren outlet store, and the product line is Polo golf shirts. A product manager and the General Manager for Outlet Sales are analyzing the discounted price to be offered at the outlet stores. Let’s work through t
> The setting is a Ralph Lauren outlet store, and the product line is Polo golf shirts. A product manager and the General Manager for Outlet Sales are analyzing the discounted price to be offered at the outlet stores. Let’s work through t
> The setting is a Ralph Lauren outlet store, and the product line is Polo golf shirts. A product manager and the General Manager for Outlet Sales are analyzing the discounted price to be offered at the outlet stores. Let’s work through t
> The setting is a Ralph Lauren outlet store, and the product line is Polo golf shirts. A product manager and the General Manager for Outlet Sales are analyzing the discounted price to be offered at the outlet stores. Let’s work through t
> Specific Electric Co. asks you to implement a pay-for-performance incentive contract for its new CEO and four EVPs on the Executive Committee. The five managers can either work really hard with 70 hour weeks at a personal opportunity cost of $200,000 in
> Virginia is an accountant for a global CPA firm. She is being temporarily transferred from the Raleigh, North Carolina, office to Tokyo. She will leave Raleigh on October 7, 2017, and will be out of the country for four years. She sells her personal resi
> Using the information from Problem 54, calculate the amount of tax liability in each instance. Data from question 54: Determine taxable income in each of the following instances. Assume that the corporation is a C corporation and that book income is be
> Reid’s personal residence is condemned on September 12, 2017, as part of a plan to add two lanes to the existing highway. His adjusted basis is $300,000. He receives condemnation proceeds of $340,000 on September 30, 2017. He purchases another personal r
> Evelyn has rental income of $48,000 and passive income of $18,000. She also has $148,000 of losses from a real estate rental activity in which she actively participates. Evelyn’s AGI is $95,000 before considering this activity. How much rental loss can s
> Patti’s garage (used to store business property) is destroyed by a fire. She decides not to replace it and uses the insurance proceeds to invest in her business. The garage had an adjusted basis of $50,000. a. If the insurance proceeds total $20,000, wh
> Joshua owns undeveloped land that has an adjusted basis of $45,000. He exchanges it for other undeveloped land with an FMV of $70,000. a. What are his realized and recognized gain or loss on the exchange? b. What is his basis in the acquired land?
> Kim owns equipment that is used exclusively in her business. The equipment has an adjusted basis of $8,500 (FMV $5,000). Kim transfers the equipment and $2,000 cash to David for a computer (also used for business purposes) that has an FMV of $7,000. a.
> Cindy, Casey, and Kara each invested $30,000 in a real estate venture. The partnership borrowed $200,000 and purchased a warehouse for $290,000. The note was secured by the building; there was no personal recourse against the partners. What is each partn
> Benny sells an apartment building. His adjusted basis for regular income tax purposes is $450,000, and it is $475,000 for AMT purposes. He receives $700,000 from the sale. a. Calculate Benny’s gain for regular income tax purposes. b. Calculate Benny’s
> Julia acquired passive Activity A in January 2013 and passive Activity B in July 2014. Until 2016, Activity A was profitable. Activity A produced a loss of $150,000 in 2016 and a loss of $150,000 in 2017. She has passive income from Activity B of $50,000
> Clay Company uses the completed contract method on a contract that requires 14 months to complete. The contract is for $750,000, and has estimated costs of $425,000. At the end of 2017, $210,000 of the costs had been incurred. The contract is completed o
> Herbie is the owner of two apartment buildings. Following is information related to the two buildings: Date Acquired Total Cost Cost Allocated to Land Building A 3/15/97 $300,000 $40,000 Building B 8/31/04 $600,000 $95,000 Herbie el
> William is not married, nor does he have any dependents. He does not itemize deductions. His taxable income for 2017 was $87,000. His AMT adjustments totaled $125,000 (with the exception of the standard deduction and personal exemption). What is William’
> Carson had the following itemized deductions in 2017: State income taxes………………………………………….$1,500 Charitable contributions……………………………………9,900 Mortgage interest (personal residence)……………12,000 Medical expenses [$8,000-(10% ×$75,000)]……….500 Miscellaneous [
> Go to the IRS Web page (www.irs.gov) and print page 5 of a Form 1120. Complete Schedule M-1 for each of the following cases: a. Corporate financial statement net income of $52,000 including tax expense of $15,000, charitable contributions of $3,000, an
> Dominique is a manager for a regional bank. He is being relocated several states away to act as a temporary manager while a new branch is interviewing for a permanent manager. He will leave on May 1, 2017, and will be at the new location for less than on
> On February 1, 2017, a 39-year-old widow buys a new residence for $150,000. Three months later, she sells her old residence for $310,000 (adjusted basis of $120,000). Selling expenses totaled $21,000. She lived in the old house for 15 years. a. What are
> In 2017, Andrew contributed equipment with an adjusted basis of $20,000 and a FMV of $18,000 to Construction Limited Partnership (CLP) in return for a 3% limited partnership interest. Andrew’s share of CLP income and losses for the year were as follows:
> What is Schedule M-1, and what is its purpose?
> In what circumstances does a corporation record a gain related to a distribution to a shareholder?
> Are medical expenses treated differently for AMT purposes than for regular tax purposes? If so, explain.
> Explain the rules associated with the carryback and carryforward of net operating losses.
> On what dates are estimated payments due for a calendar year corporation? What are the dates for a corporation with a fiscal year ending August 31?
> When an involuntary conversion occurs and the taxpayer receives insurance proceeds, what must the taxpayer do to guarantee that no gain is recognized?
> What is an involuntary conversion?
> Explain the rules pertaining to the deductibility of charitable contributions for a C corporation.
> What are the special provisions for like-kind exchanges between related-parties? Why are these special provisions included in the IRC?
> What is a passive activity? What types of activities are automatically considered passive?
> Must both parties in a potential like-kind exchange agree to the exchange? If not, how can the transaction be structured to defer any gain?
> When a loss is disallowed under the passive activity loss rules, what happens to that loss in future years?
> Discuss the concept of material participation. To be considered a material participant, what tests must the taxpayer satisfy?
> What is boot? How does the receipt of boot affect a like-kind exchange?
> What types of properties do not qualify for like-kind exchange treatment?
> Can the exchange of personal-use property qualify as a like-kind exchange? Why or why not?
> Determine the amount of tax liability in each of the following cases. a. Taxable income of $45,200. b. Taxable income of $450,200. c. Taxable income of $4,500,200. d. Taxable income of $14,500,200. e. Taxable income of $45,000,200.
> Determine the deductible charitable contribution in each of the following instances. a. Charitable contribution of $4,000 and taxable income before charitable contribution of $50,000. b. Charitable contribution of $8,000 and taxable income before charita
> For each of the following cases, determine the amount of capital gain or loss to report in each year (after taking into account any applicable carrybacks) and the capital loss carryforward to 2017, if any. Assume that 2011 is the first year of operation
> Determine the amount of dividends received deduction in each of the following instances. In all cases, the net income figure includes the full dividend. a. Dividend of $10,000 from a 45% owned corporation; taxable income before DRD of $50,000. b. Divide
> Explain the rules associated with capital loss carrybacks and carryforwards.
> Explain the operation of the dividends received deduction.
> Using the information from Problem 47, determine the basis of the property contributed in the hands of the corporation in each instance. Assume that the 80% rule is met in all cases. Data from question 47: Determine the basis of stock in the hands of th
> Determine the basis of stock in the hands of the shareholder in each of the following instances. Assume that the 80% rule is met in all cases. a. Contribution of property with a basis of $1,000 and an FMV of $1,400. b. Contribution of property with a bas
> An individual contributes property with an FMV in excess of basis to a corporation in exchange for stock. The property is subject to a mortgage. In each of the following instances, determine the basis of the stock in the hands of the shareholder and the
> Refer to Problem 58. Determine the amount of taxable income and separately stated items in each case, assuming the corporation is a Subchapter S corporation. Ignore any carryforward items. Data from question 58: Go to the IRS Web page (www.irs.gov) and
> Refer to Problem 54. Determine the amount of taxable income and separately stated items in each case, assuming the corporation was a Subchapter S corporation. Data from question 54: Determine taxable income in each of the following instances. Assume tha
> A corporation has regular taxable income of $370,000 and a regular tax liability of $125,800. It has positive tax preference items totaling $310,000. You have determined that the corporation is subject to alternative minimum tax because it has average an
> Determine the amount of taxable dividend, nontaxable distribution, and capital gain, for the distributions made in each of the following cases: a. Corporate E&P of $10,000, shareholder stock basis of $12,000, distribution of $6,000. b. Corporate E&P of
> LMNO Corporation was formed in 2010. It reported net income (loss) over the 2009 through 2016 tax years, before accounting for any net operating losses, as follows: 2010 $ (4,000) 2011 $ 19,000 2012 $ 23,000 2013 $ (31,000) 2014 $ 11,000 2015 $ ( 8,000)
> Determine taxable income in each of the following instances. Assume that the corporation is a C corporation and that book income is before any income tax expense. a. Book income of $50,000 including capital gains of $2,000, a charitable contribution of $
> What is the dividends received deduction? What is its purpose?
> When a corporation is formed, in certain cases the transferor may report a gain. What are the instances in which a gain would be reported? In these cases, what is the basis of the stock held by the transferor?
> Roberto has a basis of $6,000 in a partnership at the beginning of the year. He receives $7,000 in cash distributions, his distributive share of income is $3,500, and he receives a land distribution with a basis of $6,000 (FMV $12,000). a. Is Roberto req
> Zach contributed land with a FMV of $25,000 and a basis of $14,000 to a partnership on April 5, 2011. On June 6, 2017, the partnership distributed the land to Art, a partner in the same partnership. At distribution, the land had a FMV of $29,000. a. Wha
> Barbara is single and owns a home in the city, which is her primary residence. She also owns a cottage at the beach, which she treats as a vacation home. In April 2017, she borrowed $50,000 on a home equity loan and used the proceeds to pay off credit ca
> Arnold exercised an incentive stock option in 2014, acquiring 1,500 shares of stock at an option price of $80 per share. The FMV of the stock at the date of exercise was $110 per share. In 2016, the rights become freely transferable and are not subject t
> This year Robert had the following income and losses from four passive activities: Activity 1……………………………..$(20,000) Activity 2………………………………..(10,000) Activity 3………………………………….(5,000) Activity 4…………………………………..33,000 Activity 4 had $10,000 of passive losse
> Lewis owns 200 shares of stock in Modlin Corporation. His adjusted basis for the stock is $180,000. On December 15, 2017, he sells the stock for $170,000. He purchases 200 shares of Modlin Corporation stock on January 8, 2018, for $170,000. a. What are L
> Harold owns 130 shares of stock in Becker Corporation. His adjusted basis for the stock is $210,000. On December 15, 2017, he sells the stock for $180,000. He purchases 200 shares of Becker Corporation stock on January 12, 2018, for $195,000. a. What ar
> On January 1, 2017, Myron sells stock that has a $50,000 FMV on the date of the sale (basis $75,000) to his son Vernon. On October 21, 2017, Vernon sells the stock to an unrelated party. In each of the following, determine the tax consequences of these t
> Crystal owns 150 shares of Carson, Inc., stock that has an adjusted basis of $100,000. On December 18, 2017, she sells the 150 shares for FMV ($88,000). On January 7, 2018, she purchases 200 shares of Carson stock for $127,500. a. What are Crystal’s re
> An individual contributes property with a fair market value in excess of basis to a corporation in exchange for stock. What is the basis of the stock in the hands of the shareholder, and what is the basis of the property contributed in the hands of the c
> In 2015, Jerry acquired an interest in a partnership in which he is not a material participant. The partnership was profitable until 2016. Jerry’s basis in the partnership interest at the beginning of 2016 was $55,000. In 2016, his share of the partnersh
> Jackson invested $190,000 in a passive activity five years ago. On January 1, 2015, his at-risk amount in the activity was $45,000. His share of the income and losses in the activity were $52,000 loss in 2015, $20,000 loss in 2016, and $80,000 gain in 20
> Hunter has a $38,000 loss from an investment in a partnership in which he does not participate. His basis in the interest is $35,000. a. How much of the loss is disallowed by the at-risk rules? b. How much of the loss is disallowed by the passive loss
> Pedro sells investment land on September 1, 2017. Information pertaining to the sale follows: Adjusted basis …………………………………..$25,000 Selling price………………….…………………….90,000 Selling expenses……….……………………………1,500 Down payment…………………………………….12,000 Four installm
> Lucy has AGI of $120,000 before considering losses from some rental real estate she owns (she actively participates). She had the following losses from her rental property: Rental property 1……………………….$(22,000) Rental property 2…………………………..(5,000) a. Ho
> Jessica’s office building is destroyed by fire on November 15, 2017. The adjusted basis of the building is $410,000. She receives insurance proceeds of $550,000 on December 12, 2017. a. Calculate her realized and recognized gain or loss for the replace
> Indicate whether the property acquired qualifies as replacement property for each of the following involuntary conversions: a. The Harts’ personal residence is destroyed by a hurricane. They decide not to acquire a replacement residence but to invest the
> Bryan and Gayle are equal partners in BG Partnership. The partnership reports the following items of income and expense: Ordinary income from operations…………………$13,000 Interest income………………………………………………5,000 Long-term capital gains…………………………………23,00
> Christine died owning an interest in a passive activity property. The property had an adjusted basis of $210,000, a fair market value of $224,000, and suspended losses of $21,000. What can be deducted on her final income tax return?
> Moe, Johnny, and Raymond form a partnership and contribute the following assets: Johnny’s building has a mortgage of $60,000, which the partnership assumes. a. Do any of the partners recognize any gain? If so, how much and why? b. Wh
> In what instances could again be recorded associated with the issuance of stock upon formation of a corporation? Assume that the 80% test is met.
> LaRhonda owns an office building that has an adjusted basis of $45,000. The building is subject to a mortgage of $20,000. She transfers the building to Miguel in exchange for $15,000 cash and a warehouse with an FMV of $50,000. Miguel assumes the mortgag
> Viktor exchanges stock (adjusted basis $18,000, FMV $25,000) and real estate (adjusted basis $18,000, FMV $44,000) held for investment for other real estate to be held for investment. The real estate acquired in the exchange has an FMV of $67,000. a. W
> What is the basis of the new property in each of the following situations? Is any gain recognized in the following transactions? a. Rental house with an adjusted basis of $100,000 exchanged for personal-use river cottage with an FMV of $130,000. b. Gener
> On June 1 of the current year, Patti contributes equipment with a $45,000 basis and a $35,000 FMV in exchange for a partnership interest. She purchased the equipment three years ago. a. What is Patti’s basis in her partnership interest? b. What is Patti
> Carlton holds undeveloped land for investment. His adjusted basis in the land is $200,000, and the FMV is $325,000. On November 1, 2017, he exchanges this land for land owned by his son, who is 31 years old. The appraised value of his son’s land is $320,
> Is the §179 expense deduction allowed for partnerships? If so, is § 179 an ordinary income item or a separately stated item? Why?
> Discuss the tax basis calculation adjustment. Why is the gain or loss on the sale of depreciable assets different for AMT purposes than for regular tax purposes?
> Are the depreciation lives the same for AMT purposes as for regular tax purposes? If not, how are the lives determined for AMT?
> What happens in the following circumstances if a wife, prior to marriage, uses the exclusion on the sale of a residence and subsequently (after marriage) sells a second residence within two years? a. The new husband sells a residence; b. The new husband
> Discuss the AMT formula and how it relates to the regular income tax. Include in your discussion factors that cause AMT to be assessed.
> Explain the 80% rule as it pertains to the formation of a corporation.
