Questions from Federal Taxation

Q: Isle Corporation’s entire operations are located in State A. Of Isle’s

Isle Corporation’s entire operations are located in State A. Of Isle’s $600,000 sales, 60% are made in State A and 40% are made in State B. Isle’s solicitation of sales in State B is limited to mailin...

Q: Your client, HillTop, is a retailer of women’s clothing.

Your client, HillTop, is a retailer of women’s clothing. It has increased sales during the holiday season by advertising gift cards for in-store and online use. HillTop has found that gift card holder...

Q: Fillon Corporation’s operations include two manufacturing facilities, one in State A

Fillon Corporation’s operations include two manufacturing facilities, one in State A and one in State B. The plant located in A generated $200,000 of income, and the plant located in B generated a los...

Q: Determine whether the sourcing of income for the following sales is U

Determine whether the sourcing of income for the following sales is U.S. or foreign. a. Suarez, an NRA, sells stock in Home Depot, a U.S. corporation, through a broker in San Antonio. b. Chris sells s...

Q: Shane and Brittany both serve as treasurer for a § 501(

Shane and Brittany both serve as treasurer for a § 501(c)(3) exempt organization. Neither exempt organization is a church. Each year, Shane’s exempt organization files a Form 990 while Brittany’s exem...

Q: Goose Corporation has a basis of $2.4 million in

Goose Corporation has a basis of $2.4 million in the stock of Swift Corporation, a wholly owned subsidiary acquired 30 years ago. Goose liquidates Swift Corporation and receives assets that are worth...

Q: You are working with the top management of one of your clients

You are working with the top management of one of your clients in selecting the U.S. location for a new manufacturing operation. Craft a plan for the CEO to use in discussions with the economic develo...

Q: State A enjoys a prosperous economy, with high real estate values

State A enjoys a prosperous economy, with high real estate values and compensation levels. State B’s economy has seen better days—property values are depressed, and unemployment is higher than in othe...

Q: Otis is the CEO of Rectify, Inc., a private foundation

Otis is the CEO of Rectify, Inc., a private foundation. Otis invests $500,000 (80%) of the foundation’s investment portfolio in high-risk derivatives. Previously, the $500,000 had been invested in cor...

Q: Winston recently became the treasurer of Homeless, Inc., a §

Winston recently became the treasurer of Homeless, Inc., a § 501(c)(3) organization that feeds individuals who are in challenging circumstances. One of the entity’s directors has proposed that Homeles...