Questions from Federal Taxation

Q: On May 1 of the current year, Tara sells a building

On May 1 of the current year, Tara sells a building to Janet for $500,000. Tara’s basis in the building is $300,000. The county in which the building is located has a real property tax year that ends...

Q: On January 1 of the current year, Scott borrows $80

On January 1 of the current year, Scott borrows $80,000, pledging the assets of his business as collateral. He immediately deposits the money in an interest-bearing checking account. Scott already had...

Q: During the current year, Travis takes out a $40,

During the current year, Travis takes out a $40,000 loan, using stock he owns as collateral. He uses $10,000 to purchase a car, which he uses 100% for personal use. He uses the remaining funds to purc...

Q: During the current year, Tina purchases a beachfront condominium for $

During the current year, Tina purchases a beachfront condominium for $600,000, paying $150,000 down and taking out a $450,000 mortgage, secured by the property. At the time of the purchase, the outsta...

Q: Several years ago, Magdelena purchased a new residence for $300

Several years ago, Magdelena purchased a new residence for $300,000. Currently, the outstanding mortgage on the residence is $260,000. The current fair market value of the home is $330,000. Magdelena...

Q: What is the closed transaction doctrine, and why does it exist

What is the closed transaction doctrine, and why does it exist for purposes of recognizing a loss realized on holding property?

Q: When property is disposed of, what factors influence the amount of

When property is disposed of, what factors influence the amount of the deductible loss?

Q: Describe the usual tax consequences that apply to a worthless security.

Describe the usual tax consequences that apply to a worthless security.

Q: Charley Long is a truck driver, the 18-wheeler variety

Charley Long is a truck driver, the 18-wheeler variety. He works for Fishy Co., a seafood company in Mobile, Alabama, and drives a company truck. Charley’s job entails leaving Mobile at 4:00 PM each d...

Q: Under what circumstances will a loss that is realized on a worthless

Under what circumstances will a loss that is realized on a worthless security not be treated as a capital loss?