Questions from Federal Taxation

Q: Why do most taxpayers prefer to currently expense research and experimental expenditures

Why do most taxpayers prefer to currently expense research and experimental expenditures?

Q: In a business combination, why does the buyer generally prefer to

In a business combination, why does the buyer generally prefer to allocate as much of the purchase price to short-lived depreciable assets, ordinary assets such as inventory, and Sec. 197 intangible a...

Q: In 2016, Mark purchased two separate activities. Information regarding these

In 2016, Mark purchased two separate activities. Information regarding these activities for 2016 and 2017 is as follows: The 2016 losses were suspended losses for that year. During 2017, Mark also rep...

Q: Explain the difference between cost depletion and percentage depletion. Which of

Explain the difference between cost depletion and percentage depletion. Which of these two methods generally provides the largest deduction?

Q: Simon acquires an interest in an oil property for $50,

Simon acquires an interest in an oil property for $50,000. Intangible drilling costs (IDCs) in the initial year are $10,000. Cost depletion is $5,000 if the IDCs are expensed and $6,000 if the costs a...

Q: Georgia Corporation acquires a business automobile for $30,000 on

Georgia Corporation acquires a business automobile for $30,000 on December 31 of the current year but does not actually place the automobile into service until January 1 of the following year. What ta...

Q: Paula is planning to either purchase or lease a $50,

Paula is planning to either purchase or lease a $50,000 automobile. She anticipates that business use of the auto will be 60% for the first two years but will decline to 40% in years three through fiv...

Q: In the current year, Coastal Corporation acquires all of the net

In the current year, Coastal Corporation acquires all of the net assets of Acorn Corporation for $2,000,000. The purchase agreement allocated the following amounts to the individual assets and liabili...

Q: Bonnie’s charitable contributions and AGI for the past four years were as

Bonnie’s charitable contributions and AGI for the past four years were as follows: What is the amount of the charitable deduction for each year and the order in which the deduction a...

Q: Woburn Corporation uses the calendar year as its tax year. Woburn

Woburn Corporation uses the calendar year as its tax year. Woburn purchases and places into service $850,000 of depreciable property during 2017: You are working in Woburn’s tax depa...