Locate PLR 8733007 and Rev. Rul. 81-219. a. Briefly summarize the tax issue and conclusion of each ruling. b. Under what circumstances can a researcher rely on the private letter ruling? c. Under...

Aaron, Deanne, and Keon formed the Blue Bell General Partnership at the beginning of the current year. Aaron and Deanne each contributed $110,000 and Keon transferred an acre of undeveloped land to...

James and Suzanne engaged in the grocery business as partners. In one year they earned considerable money, and at the end of the year they invested a part of the profits in oil land, taking title to...

Valley Trout Farms ordered fish food from Rangen. Both parties were merchants. The invoice that was sent with the order stated that a specified chargea percentage common in the industrywould be added...

Lehor collects antique cars. He contracts to purchase spare parts for a 1938 engine from Beem. These parts are not made any more and are scarce. To obtain the contract with Beem, Lehor agrees to pay...

While Clara Novak was sick, her daughter Janie helped her in many ways. Clara died, and Janie then claimed that she was entitled to be paid for the services she had rendered her mother. This claim...

Thomas Bell, a minor, went to work in the Pittsburgh beauty parlor of Sam Pankas and agreed that when he left the employment, he would not work in or run a beauty parlor business within a 10-mile...

Gordon is the only limited partner in Bushmill Ventures, a limited partnership whose general partners are Daniels and McKenna. Gordon contributed $10,000 for his limited partnership interest and...

(Multiple choice) 1. Financial statement fraud is usually committed by: a. Executives. b. Managers. c. Stockholders. d. Outsiders. e. Both a and b. 2. Which officer in a company is most likely to be...

Donald and Gloria Bowden hosted a late afternoon cookout at their home in South Carolina, inviting mostly business acquaintances. Justin Parks, who was nineteen years old, attended the party....

Douglas Singletary bought a manufactured home from Andys Mobile Home and Land Sales. The contract stated that the buyer accepted the home as is where is. Singletary paid the full price, and his crew...

Enercio contributes $100,000 in exchange for a 40% interest in the calendar year ABC LLC, which is taxed as a partnership. In 2015, the LLC generates $80,000 of ordinary taxable income. Enercio...

Karel Svoboda, a credit officer for Rogue Bank, evaluated and approved his employers extensions of credit to clients. These responsibilities gave Svoboda access to nonpublic information about the...

Suppose that the basil does not pass the chemical-residue inspection. Which concept discussed in the chapter might allow Vals to refuse to perform the contract in this situation? Vals Foods signs a...

Discuss the standard of care traditionally required of the bailee for the bailed property in each of the following situations, and determine whether the bailee breached that duty. 1. Ricardo borrows...

Ryder leased a truck to Florida Food Service; Powers, an employee, drove it to make deliveries. He noticed that the strap used to close the rear door was frayed, and he asked Ryder to fix it. Ryder...

Dickson contracted to build a house for Moran. When it was approximately 25 percent to 40 percent completed, Moran would not let Dickson work anymore because he was not following the building plans...

Peggy Williams helped eighty-seven-year-old Melvin Kaufman care for his wife and Williamss great aunt, Elsie, for several years before Elsies death. Melvin then asked Williams to take care of him the...

Deerwood Corporation lends its principal shareholder, Lafayette, $500,000 on July 1 of the current year. The loan is interest-free and payable on demand. On December 31, the imputed interest rules...

Winona Ryder was arrested for shoplifting from Saks Fifth Avenue in California. One of the members of the jury panel for her trial was Peter Guber, a Hollywood executive in charge of the production...

Jaclyn Biggs, who files as a head of household, never paid AMT before 2015. In 2015, her $197,900 taxable income included $178,000 ordinary income and a $19,900 capital gain taxed at 15 percent. Her...

1. On what basis might the federal district court in Illinois exercise jurisdiction in this case? 2. Does the federal district court have original or appellate jurisdiction? 3. Suppose that Garner...

Jessie Lynch became seriously ill and needed medical attention. Her sister, Ethel Sales, took her to the Forsyth Memorial Hospital in North Carolina for treatment. Lynch was ad-mitted for...

Mark Wooden sent an e- mail to an alderwoman for the city of St. Louis. Attached was a nineteen- minute audio file that compared her to the biblical character Jezebel. The audio said she was a bitch...

Bill and Betty Ma owned half of a two- unit residential building. Betty lived in the unit, but Bill did not. To collect a judgment against the Mas, Mei- Fang Zhang obtained a writ of execution...

Macon County Landfill Corp. applied for permission to expand the boundaries of its landfill. Tate and others opposed the application. After a number of hearings, the appropriate agency granted the...

Smith has in his possession the following instrument: September 1, 2003 I, Selma Ray, hereby promise to pay Helen Savit One Thousand Dollars ($1,000) one year after date. This instrument was given...

Dozier and his wife, daughter, and grandson lived in the house Dozier owned. At the request of the daughter and grandson, Paschall made some improvements to the house. Dozier did not authorize these,...

Genix, Inc., has contracted to sell Larson five hundred washing machines of a certain model at list price. Genix is to ship the goods on or before December 1. Genix produces one thousand washing...

Alice and Jane form Osprey Corporation. Alice transfers property, basis of $25,000 and fair market value of $200,000, for 50 shares in Osprey Corporation. Jane transfers property, basis of $50,000...

This year, Company LI built a light industrial facility in County G. The assessed property tax value of the facility is $20 million. To convince Company LI to locate within its jurisdiction, the...

Timothy Martinez, owner of Koenig & Vits, Inc. (K& V), guaranteed K& Vs debt to Community Bank & Trust. The guaranty stated that the bank was not required to seek payment of the debt from any other...

In 1996, Troy Blackford was gambling at Prairie Meadows Casino when he destroyed a slot machine. After pleading guilty to criminal mischief, Blackford was banned from the casino. In 1998, Blackford...

Dr. Duncan R. Danforth, a 75 year old man of substantial means, married 21 year old Loretta Ollison. Immediately following the ceremony, the newlyweds went to a lawyers office, where Danforth...

Carrie D'Lake, Reed A. Green, and Doug A. Divot share a passion for golf and decide to go into the golf club manufacturing business together. On January 2, 2015, D'Lake, Green, and Divot form the...

Schmidt, operating a sole proprietorship, has a large piece of used farm equipment for sale. He offers to sell the equipment to Barry for $10,000. Discuss the legal effects of the following events on...

1. Did Hanousek have the required mental state (mens rea) to be convicted of a crime? Why or why not? 2. Which theory discussed in the chapter would enable a court to hold Hanousek criminally liable...

Burglar Bob breaks into Vince Victims house. Bob steals a flat-screen TV and laptop and does a significant amount of damage to the property before he leaves. Fortunately, Vince has a state-of-the-art...

Lorissa owes Waterbury State Bank $200,000. During the current year, she is unable to make the required payments on the loan and negotiates the following terms to extinguish the debt. Lorissa...

Martin made an oral contract with Cresheim Garage to work as its manager for two years. Cresheim wrote Martin a letter stating that the oral contract had been made and setting forth all of its terms....

CeCe Hylton and Edward Meztista, partners in a small advertising firm, agreed to terminate the business and split assets evenly. Meztista gave Hylton a two-page document showing assets, liabilities,...

Heather, an individual, owns all of the outstanding stock in Silver Corporation. Heather purchased her stock in Silver nine years ago, and her basis is $56,000. At the beginning of this year, the...

(Multiple choice) 1. Which of the following is not a fraud risk unique to e-business transactions? a. Innovative technologies where security lags process development. b. Selling new products. c....

Seth, Pete, Cara, and Jen form Kingfisher Corporation with the following consideration: *Seth receives $6,000 in cash in addition to the 30 shares. **Pete receives $9,000 in cash in addition to the...

1. Did the Hyatts accept the list of contract terms included in the computer box? Why or why not? What is the name used for this type of e-contract? 2. Suppose that the Hyatts experienced trouble...

How would your answer to Problem differ if Julio were a corporate shareholder (in the 34% tax bracket) rather than an individual shareholder and the stock ownership in Gray Corporation represented a...

Legislative Act: Section 41-1-6-9 of the state statutes defines defamation as the intentional publication of a false statement about a person. The statute defines publication as communication to a...

Samantha is the president and sole shareholder of Toucan Corporation. She is paid an annual salary of $500,000, while her son, Aaron, the company's chief financial officer, is paid a salary of...

The state of Kentucky filed a tax lien against Panbowl Energy, claiming unpaid taxes. Six months later, Panbowl bought a powerful drill from Whayne Supply, making a down payment of $11,500 and...

As an auditor, you have discovered the following problems with the accounting system of Jefferson Retailers. For each of the following occurrences, tell which of the five internal control activities...

Lewis River Golf, Inc., grew and sold sod. It bought seed from defendant, O. M. Scott & Sons, under an express warranty. But the sod grown from the Scott seeds developed weeds, a breach of Scotts...

As a new sales representative for Misco Equipment Corporation, you take a customer out to dinner. Before dinner is over, you have shaken hands on a deal to sell the customer nearly a half-million...

SeeYou, Inc., is an online social network. SeeYous members develop personalized profiles to interact and share information photos, videos, stories, activity updates, and other items with other...

Rubio, Inc., an accrual basis C corporation, reports the following amounts for the tax year. The applicable income tax rate is 30%. Compute Rubios taxable income. Book income, including the items...

On Brenda Sniezeks first day of work for the Kansas City Chiefs Football Club, she signed a document that purported to compel arbitration of any disputes that she might have with the Chiefs. In the...

1. This scenario illustrates one of the main reasons why ethical problems occur in business. What is that reason? 2. Would a person who adheres to the principle of rights consider it ethical for...

1. Do you think Gardiah Mfana is an actual person? 2. Do you believe that his proposition is real? Why or why not? 3. List and explain at least three elements of fraud that are present in this...

Locate the court case Ellis v. Jarvis et al., 117 AFTR 2d 2016-1932. Using only the head notes, answer the following questions: a. What issue(s) did the court address? b. What was the ruling of the...

What social forces are involved in the rule of law governing the liability of a common carrier for loss of freight?

An owner abandoned his van in an alley in Chicago. In spite of repeated complaints to the police, the van was allowed to remain in the alley. After several months, it was stripped of most of the...

Aldrich and Co. sold goods to Donovan on credit. The amount owed grew steadily, and finally Aldrich refused to sell any more to Donovan unless Donovan signed a promissory note for the amount due....

Jarvie loves to bike. In fact, he has always turned down better paying jobs to work in bicycle shops where he gets an employee discount. At Jarvie's current shop, Bad Dog Cycles, each employee is...

In year 0, Jarmex paid $55,000 for an overhaul of a tangible operating asset. Jarmex has a 34 percent marginal tax rate and uses a 7 percent discount rate to compute NPV. a. Compute the after-tax...

Candlewood LLC started business on September 1, 2016 and adopted a calendar year. During 2016, Candlewood incurred $6,500 in legal fees for drafting the LLC's operating agreement and $3,000 in...

Sears sold a lawn tractor to Cosmo Fiscante for $1,481. Fiscante paid with his personal credit card. Sears kept a valid security interest in the lawnmower but did not perfect. Fiscante had the...

Stewart P. Blanchard borrowed $ 50,000 from Progressive Bank & Trust Company (Progressive) to purchase a home. As part of the transaction, Blanchard signed a note secured by a mortgage. The note...

Richard Griffin and three other men owned a grain company called Bearhouse, Inc., which needed to borrow money. First National Bank was willing to loan $490,000, but it insisted that the four men...

Schock, the buyer, negotiated to purchase a mobile home that was owned by and located on the sellers property. On April 15, 1985, Schock appeared at the Ronderos (the sellers) home and paid them the...

Howell made long-distance telephone calls through the telephone companys computer-controlled switching system to solicit funding for a nonexistent business enterprise. What crimes did Howell commit?...

1. Do you think that the law favors debtors at the expense of creditors or vice versa? Is there any way to achieve a better balance between the interests of creditors and those of debtors? 2. So long...

If Idle v. City Co. is authority, to what extent?

FFP Operating Partners, L.P. (FFP Operating) operates a number of convenience stores and gas stations. FFP Operating executed 31 promissory notes in favor of Franchise Mortgage Acceptance Company...

Neal Rubin, while driving his car in Chicago, inadvertently blocked the path of a Yellow Cab Co. taxi driven by Robert Ball, causing the taxi to swerve and hit Rubins car. Angered by Rubins driving,...

You receive an anonymous tip that your controller is embezzling assets from your company. You begin your investigation by interviewing several employees in the accounting department, who report no...

1. How should Captain Jones begin the process of preparing a new budget? 2. Assuming that the Greenfield officers are still relying on preventive patrol, how could a change in strategy benefit the...

SilverEdge Systems Software hired Catherine Conrad to perform a singing telegram. SilverEdge arranged for James Bendewald to record Conrads performance of her copyrighted song to post on its Web...

Geranium, Inc., has the following net 1231 results for each of the years shown. What is the nature of the net gain in 2013 and 2014? Tax Year 2009 2010 2011 2012 2013 2014 Net 1231 Loss $18,000...

Jocelyn contributes land with a basis of $60,000 and fair market value of $90,000 and inventory with a basis of $5,000 and fair market value of $8,000 in exchange for 100% of Zion Corporation stock....

Glenn refuses an invitation to become a partner of Dorothy and Cynthia in a retail grocery business. Nevertheless, Dorothy inserts an advertisement in the local newspaper representing Glenn as their...

Ruth and Stella were sisters. They owned a house as joint tenants with right of survivorship. Ruth sold her half interest to Roy. Thereafter, Stella died, and Roy claimed the entire property by...

Newmark & Co. Real Estate, Inc., contacted 2615 East 17 Street Realty, LLC, to lease certain real property on behalf of a client. Newmark e-mailed the landlord a separate agreement for the payment of...

Using the net worth method, analyze the financial data at the bottom of this page for potential signs of fraud or embezzlement: 1. Do your results indicate that this person could be committing some...

Franklin Miller operated Miller Seed Co. in Pea Ridge, Arkansas. He bought, processed, and sold fescue seed, which is used for growing pasture and fodder grass. Farmers brought seed to Miller, who...

Sonia, a retailer, has the following assets: a factory worth $1 million; accounts receivable amounting to $750,000, which fall due in four to six months; and $20,000 cash in the bank. Sonias sole...

Decide whether each situation is or is not a symptom of revenue fraud. Then explain (1) Why the situation is or is not a symptom and (2) If it is a symptom, how it would be found using computer...

Pink Corporation is a calendar year taxpayer. Pete owns one-third (100 shares) of Pink stock. His basis in the stock is $25,000. Cheryl owns two-thirds (200 shares) of Pink stock. Her basis in the...

Custom Copies, Inc., prepares and sells course-packs, which contain compilations of readings for college courses. A teacher selects the readings and delivers a syllabus to the copy shop, which...

New York Citys charter authorized the New York City Board of Health to adopt a health code that it declared to have the force and effect of law. The board adopted a code that provided for the...

John Doe, a fraud examiner, has been hired by ABC Corporation to investigate a shortage of cash, which management thinks is being caused by fraudulent behavior. John Doe could spend his time and...

Evangel Temple Assembly of God leased a facility from Wood Care Centers, Inc., to house evacuees who had lost their homes in Hurricane Katrina. One clause in the lease contract said that Evangel...

Would the name Hallowed receive protection as a trademark or as trade dress? Two computer science majors, Trent and Xavier, have an idea for a new video game, which they propose to call Hallowed....

Boxer Incorporated has hired you as a consultant to implement a data-driven fraud detection program in the company. One of the owners, Priscilla Boxer, asks you to give a presentation to several...

Suppose that a railroad runs beside a field in which commercial crops are grown. The railroad is powered by a steam locomotive that spews hot cinders out of its smokestack. From time to time those...

Mia owns a warehouse that has a cost basis to her of $80,000. The city condemns the warehouse to make room for a new fire station. It pays Mia $400,000 for the property, its agreed-to fair market...

1. Some observers maintain that privacy rights are quickly becoming a thing of the past. In your opinion, is it possible to protect privacy rights in todays online world? 2. Many argue that the...

C. A. Nimocks was a promoter engaged in organizing the Times Printing Company. On September 12, on behalf of the proposed corporation, he made a written contract with McArthur for her services as...

In integrative problem 85 in Chapter 4, you were asked to calculate Carmins gross income for 2011. This is the second phase, which provides the additional information necessary for you to calculate...

In the following examples, use the statutory and case law presented in the hypothetical at the beginning of the chapter, that is, 96-25-16 and Karl v. Herald. The client seeks redress for the other...

D.V.G. (a minor) was injured in a one- car auto accident in Hoover, Alabama. The vehicle was covered by an insurance policy issued by Nationwide Mutual Insurance Co. Stan Brobston, D.V.G.s attorney,...

Sarah loans $50,000 to her best friend, John. John uses the money to open a pizza parlor next to the local high school. Three years later, when John still owed Sarah $15,000, John closed the pizza...