The following information relates to Tom, a single taxpayer, age 18: Salary $1,800 Interest income 1,600 Itemized deductions 600 a. Compute Toms taxable income assuming he is self-supporting. b....

Data Corporation has four employees and provides group term life insurance coverage for all four employees. Coverage is nondiscriminatory and is as follows: a. How much may Data Corporation deduct...

Without considering the following capital gains and losses, Charlene, who is single, has taxable income of $460,000 and a marginal tax rate of 39.6%. During the year, she sold stock held for nine...

The police obtained a search warrant based on an affidavit that contained the following allegations: (a) Donald was seen crossing a State line on four occasions during a five-day period and going to...

Rachel bought a car from the Beautiful Used Car Agency under a written contract. She purchased the car in reliance on Beautifuls agents oral representations that it had never been in a wreck and...

White Plains Coat & Apron Co. is a New Yorkbased linen rental business. Cintas Corp. is a nationwide business that rents similar products. White Plains had five-year exclusive contracts with some of...

Buster Cogdill, a real estate developer, made an offer to the Bank of Benton to have the bank provide construction financing for the development of an outlet mall, with funds to be provided at prime...

In the current year, Riflebird Company had operating income of $220,000, operating expenses of $175,000, and a long-term capital loss of $10,000. How do Riflebird Company and Roger, the sole owner of...

Karen Thorpe is a purchasing agent for GymNast, Inc., a manufacturer of sports equipment. Karen has authority to sign checks in payment for purchases made by GymNast. Karen makes out three checks to...

On March 3, 2002, pursuant to a public offering, First All State Trucking Corp. (FAST) issued securities to investors in denominations of $1,000. The interest rate was 7 percent per year payable...

Berdine has a basis of $32,000 in her partnership interest and receives land with an adjusted basis to the partnership of $78,000 in termination of her interest. (The partnership has no hot assets.)...

Westinghouse Electric Corporation entered into uranium supply contracts with 22 electric utilities during the late 1960s. The contract prices ranged from $7 to $10 per pound. The Arab oil embargo and...

Analyze Exhibit and answer the following questions: a. Does a discrepancy exist between actual time spent and the total of billable time, creditable non-billable time, and non-creditable non-billable...

Determine whether the following transactions are taxable. If a transaction is not taxable, indicate what type of reorganization is effected, if any. a. Alpha Corporation owns assets valued at...

ParentCo owns all of the stock of DaughterCo, and the group files its Federal income tax returns on a consolidated basis. Both taxpayers are subject to the AMT this year due to active operations in...

Harris owned a farm that was worth about $600 per acre. By false representations of fact, Harris induced Pringle to buy the farm at $1,500 per acre. Shortly after taking possession of the farm,...

How would the court classify the Chickasaw Club corporation-domestic or foreign, public or private? William Sharp was the sole shareholder and manager of Chickasaw Club, Inc., an S corporation that...

Ellen borrowed money from Farmers Bank. As evidence of the loan, she signed a promissory note by which she promised to pay to the bank in installments the amount of the loan together with interest...

Nuco Plastics, Inc., was developing production molds for Universal Plastics, Inc. During the course of the development of the molds, Universal changed specifications and required the use of different...

Corporation Q, a calendar year taxpayer, has incurred the following Section 1231 net gains and losses since its formation in 2012. a. In 2015, Corporation Q sold only one asset and recognized a...

Provide the proper citations (including both primary and secondary citations where applicable) for the authorities listed below. (For secondary citations, reference both the AFTR and USTC.) a....

Paul Fenson is employed as a shipping supervisor. In the evenings and on weekends, he holds a second job as a real estate salesman for a national real estate firm. His financial information for 20X0...

Tranquility Funeral Home, Inc., your client, is an accrual basis taxpayer that sells "pre-need" funeral contracts. Under these contracts, the customer pays in advance for goods and services to be...

Jeff says to Brenda, I offer to sell you my PC for $900. Brenda replies, If you do not hear otherwise from me by Thursday, I have accepted your offer. Jeff agrees and does not hear from Brenda by...

55th Management Corp. in New York City owns residential property that it leases to various tenants. In June 2000, claiming that one of the tenants, Leslie Goldman, owed more than $13,000 in back...

Brenda Lewis had been employed for two years at Heartland Inns of America, LLC, and gradually worked her way up the management ladder. Lewis, who described herself as a tomboy, was commended for her...

Fuqua Homes, Inc. (Fuqua), is a manufacturer of prefabricated houses. MMM, a dealer of prefabricated homes, was a partnership created by two men named Kirk and Underhill. On seven occasions before...

Kevin and Bob have owned and operated SOA as a C corporation for a number of years. When they formed the entity, Kevin and Bob each contributed $100,000 to SOA. They each have a current basis of...

Phil and Marcy have been married for a number of years. Marcy is very wealthy, but Phil is not. In fact, Phil, who has only $10,000 of property, is very ill, and his doctor believes that he probably...

Paul owed Charles a $1,000 debt due September 1. On August 15, George, for consideration, orally promised Charles to pay the debt if Paul did not. On September 1, Paul did not pay, so Charles...

Andy, Azim, and Ashwin operate the Triple-A Steak House, a popular restaurant and bar. The three, who have been friends since childhood, are equal partners in the establishment. For the year,...

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

Firm J sold marketable securities to Company b. Firm Js tax basis in the securities was $45,250. Compute Firm Js recognized gain or loss if: a. The selling price was $60,000, and Firm J and Company B...

Bart and Kesha are in the 39.6% tax bracket. They are interested in reducing the taxes they pay each year. They are currently considering several alternatives. For each of the following alternatives,...

Hall-Mark regularly supplied electronic parts to Peter Lee. On September 11, 1992, Lee gave Hall-Mark a $100,000 check for parts it had received. Hall-Mark continued to ship parts to Lee. On...

Frederick Richmond agreed to sell UForma Shelby Business Forms, Inc., a business forms printing business, to Samuel Peters pursuant to a stock-purchase agreement at a price of $3.6 million to be paid...

Meredith, a farmer, borrowed $5,000 from Farmers Bank and gave the bank $4,000 in bearer bonds to hold as collateral for the loan. Merediths neighbor, Peterson, who had known Meredith for years,...

Assume that you are manufacturing iPad accessories and that your business is becoming more successful. You are now considering expanding operations into another country. (a) One group will explore...

Winona contracted with XtremeCast, a broadcast media firm, to cohost an Internet-streaming sports program. Winona and XtremeCast signed a new contract for each episode. In each contract, Winona...

Where does most tax research begin when someone is searching for an answer about a tax dispute?

Stephen Patterson held an account with Suntrust Bank in Alcoa, Tennessee. Juanita Wehrmanwith whom Patterson was briefly involved in a romantic relationshipstole his debit card and used it for...

Renee and Sanjeev Patel, who are married, reported taxable income of $273,000 for 2016. They incurred positive AMT adjustments of $38,000, negative AMT adjustments of $14,000, and tax preference...

Amos is a self-employed tax attorney. He and Monica, his employee, attend a conference in Dallas sponsored by the American Institute of CPAs. The following expenses are incurred during the trip:...

Polk listed property to sell with a real estate agent. Avon made an offer and the two parties went back and forth on terms. When Polk rejected an offer from Avon, Avon then accepted an earlier offer...

Mast Industries and Bazak International were two textile firms. Mast orally offered to sell certain textiles to Bazak for $103,000. Mast promised to send documents confirming the agreement, but it...

You are an internal auditor at Dunder Company. An employee of Dunder has phoned in an anonymous tip that a fellow worker, Jane, might be embezzling money. Jane has been a trusted employee of the...

The Quickie brand wheelchair is the most popular customized wheelchair on the market. Its market share is 90 percent. Other manufacturers produce special-use wheelchairs that fold, that are made of...

Blanche Creek (111 Elm Avenue, Plymouth, IN 46563) has engaged your firm because she has been charged with failure to file her 2015 Federal Form 1040. Blanche maintains that the "reasonable cause"...

Garvey owned four speedboats named Porpoise, Priscilla, Providence, and Prudence. On April 2, Garvey made written offers to sell the four boats in the order named for $4,200 each to Caldwell, Meens,...

Can Lyle establish a prima facie case of racial discrimination? Why or why not? Amaani Lyle, an African American woman, was hired by Warner Brothers Television Productions to be a scriptwriters...

Billy comes down with chicken pox and is sent home from school. His mother takes him to a pediatrician. The doctor tells her, "Well.he should be fine in about a week. Bed rest is all he really needs ...

1. What did the judge mean when he said that GeoExs one-sided arbitration scheme may well guarantee that GeoEx wins even if it loses? 2. Did the fact that the terms of the release were nonnegotiable...

Helpers, Inc., a qualifying 501(c)(3) organization, incurs lobbying expenditures of $250,000 for the taxable year and grass roots expenditures of $0. Exempt purpose expenditures for the taxable year...

Lance asks you to explain why his employer, the Good Food Truck Stop, an establishment that employs more than 30 waiters and waitresses, included $ 2,400 in tip income on his Form W-2 for the year....

Multiple Choice Questions 1. In general, what is the filing deadline for a C corporation in 2016? a. March 15 b. April 15 c. The 15th day of the 3rd month after year-end d. The 15th day of the 4th...

In the documentary movie Expelled: No Intelligence Allowed, there was a 15-second clip of Imagine, a song by John Lennon. The purpose of the scene was to criticize the songs message. His wife and...

Match the following terms with their corresponding definitions: Billing scheme Asset misappropriation Check tampering Disbursement fraud Expense scheme Investment scam Illegal gratuities Lapping...

Stock in Jaybird Corporation (555 Industry Lane, Pueblo, CO 81001) is held equally by Vera, Wade, and Wes. Jaybird seeks additional capital in the amount of $900,000 to construct a building. Vera,...

Mr. and Mrs. Dunbar have taxable income of $260,000 without considering the following sales. Consider the following independent cases where capital gains are recognized and determine the marginal tax...

What standard for limiting emissions into the air does Cotton Designs pollution-control equipment have to meet? In the late 1980s, residents of Lake Caliopa, Minnesota, began noticing an unusually...

The Constitution in Your Community You are employed by a law firm that has been retained by Mae Shen, a prominent and wealthy business leader in your community. Dissatisfied with your citys support...

In the current year, Whitaker Corporation has taxable income of $700,000 and tax preference items of $100,000. It also has $250,000 of positive AMT adjustment items and $80,000 of negative AMT...

Amy and Mitchell are equal partners in the accrual basis AM Partnership. At the beginning of the current tax year, Amy's capital account has a balance of $300,000, and the partnership has recourse...

Jason Trevor owns a commercial bakery in Blakely, Georgia, that produces a variety of goods sold in grocery stores. Trevor is required by law to perform internal tests on food produced at his plant...

On September 18, 2014, Gerald received land and a building from Frank as a gift. Frank's adjusted basis and the fair market value at the date of the gift are as follows: No gift tax was paid on the...

Adler owes Panessi, a police captain, $500. Adler threatens that unless Panessi discharges him from the debt, Adler will disclose the fact that Panessi has on several occasions become highly...

Small, admiring Jaspers watch, asked Jasper where and at what price he had purchased it. Jasper replied, I bought it at West Watch Shop about two years ago for around $85, but I am not certain as to...

Suppose that in court, Durbin argues that because the school closed down before he could finish his education, there was a failure of consideration: he did not get something of value in exchange for...

In each of the following independent situations, indicate whether the alternate valuation date can be elected. Explain why or why not. All deaths occur in 2015. Value of Gross Estate Estate Tax...

Debbie Dean issued a check to Betty Brown payable to the order of Cathy Cain and Betty Brown. Betty indorsed the check Payable to Elizabeth East, (signed) Betty Brown. What rights, if any, does...

Because litigation is so costly, many firms settle suits that they are quite sure they would win if litigated. It is cheaper to settle for $10,000 or $50,000 than to consume management time and...

Horns Crane Service furnished supplies and services under a written contract to a partnership engaged in operating a quarry and rock-crushing business. Horn brought action against Prior and Cook, the...

Jones and Ray formed a partnership on January 1, known as JR Construction Co., to engage in the construction business, each partner owning a one-half interest. On February 10, while conducting...

After part of the shares of a proposed corporation had been successfully subscribed, one of the promoters hired a carpenter to repair a building that was to be conveyed to the proposed corporation....

Janine was hospitalized with severe abdominal pain and placed in an intensive care unit. Her doctor told the hospital personnel to order around-the-clock nursing care for Janine. At the hospitals...

Rudolph Redmont, the president of Abbott Thinlite Corp., left Abbott to run Circle Corp. in competition with his former employer. It was claimed that he diverted contracts from his former employer to...

Go to Case Analysis Case 38.1, ORX Resources, Inc. v. MBW Exploration, LLC, on pages 741 and 742. Read the excerpt and answer the following questions. (a) Issue: What was the main issue in this case?...

You are the tax manager in a CPA office. One of your clients, Snapper Corporation, is also an audit client of the firm. The CFO of Snapper invites you and the audit manager for a one-week deep-sea...

Dan Miller was a commercial photographer who had taken a series of photographs that appeared in The New York Times. Newsweek magazine wanted to use the photographs. When a News-week employee named...

Morgan's Water World (MWW), an LLC, opened several years ago and reports the following net 1231 gains and losses since it began business. Year ______________________ Net 1231 Gains/(Losses) Year 1...

Goodrich Corporation uses the calendar year as its tax year. It acquires and places into service two depreciable assets during 2016: Asset #1: 7-year property; $950,000 cost; placed into service on...

Maria Ochoa receives two new credit cards on May 1. She had solicited one of them from Midtown Department Store, and the other arrived unsolicited from High-Flying Airlines. During the month of May,...

Flora Hall went to Rent-A-Center in Milwaukee and signed an agreement to make monthly payments of $77.96 for 19 months in exchange for Rent-ACenters allowing her to have a Rent-A-Center washer and...

Elliot, an officer of Impact Marketing, drew six postdated checks on Impacts account. The checks were payable to Bell for legal services to be subsequently performed for Impact. Financial Associates...

James Maciel leased an apartment in Regent Village, a university- owned housing facility for Regent University (RU) students in Virginia Beach, Virginia. The lease ran until the end of the fall...

Raugust Mathwig, Inc., a corporation, was the sole general partner of a limited partnership. Calvin Raugust was the major shareholder of this corporation. The three limited partners were Cal Lee...

Ms. V resides in a jurisdiction with a 35 percent income tax. Ms. V has $40,000 that she could invest in bonds paying 8 percent annual interest. She is also considering spending the $40,000 on a new...

Hannoon, a Kuwaiti employee who worked as an information systems manager, requested Friday afternoons off to observe weekly Muslim prayer services. His supervisor noted in his personnel file, first...

Dr. and Mrs. Sedmak (Sedmaks) were collectors of Chevrolet Corvettes. The Sedmaks saw an article in Vette Vues magazine concerning a new limited edition Corvette. The limited edition was designed to...

Shannons physician gives her some pain medication and tells her not to drive after she takes it, as the medication induces drowsiness. In spite of the doctors warning, Shannon decides to drive to the...

Colleen Matthews had just turned 22 when her hard work finally started to pay off. Six months earlier, Colleen had graduated from a state university with a masters degree in accounting. Colleen...

A taxpayer owns and operates an art gallery with a large inventory of paintings held for sale to customers. She took one of the paintings home and hung it in her dining room. A week later, a dinner...

Robert Brown applied for admission to the University of Kansas School of Law. Brown answered "no" to questions on the application asking if he had a criminal history and acknowledged that a false...

Qwest is the dominant local telephone company in 14 states and the owner of an international fiber-optic network. In 2002, the company was investigated by the SEC for not including certain expense...

1. Explain the difference between holding and dictum. 2. Can the holding of a case be broader than the precedent relied on? 3. Why should dictum not be considered binding under the doctrine of stare...

Joan and Matthew are married, have 2 children, and report the following items on their current years tax return: Determine Joan and Matthews regular tax liability and, if applicable, the amount of...

Amy and Jeff Barnes are going to operate their florist shop as a partnership or as an S corporation. Their mailing address is 5700 Richmond Highway, Alexandria, VA 22301. After paying salaries of...

Elvis Presley, a rock n roll singer, became a musical icon during a career that spanned more than twenty years, until he died at the age of 42. Many companies and individuals own copyrights to...

Austin Corporation is proposing the establishment of a pension plan that will cover only employees with salaries in excess of $150,000. No other employees are covered under comparable qualified...

Martin owns equipment used in his trade or business purchased four years ago for $200,000. Martin sells the equipment in the current year for $110,000 when its adjusted basis is $52,000. No other...