In 2011, John opened an investment account with Randy Hansen, who held himself out to the public as an investment adviser and securities broker. John contributed $200,000 to the account in 2011. John provided Randy with a power of attorney to use the $200,000 to purchase and sell securities on John's behalf. John instructed Randy to reinvest any gains and income earned. In 2011, 2012, and 2013, John received statements of the amount of income earned by his account and included these amounts in his gross income for these years. In 2014, it was discovered that Randy's purported investment advisory and brokerage activity was in fact a fraudulent investment arrangement known as a Ponzi scheme. In reality, John's account balance was zero, the money having been used by Randy in his scheme. Identify the relevant tax issues for John.
Answer to relevant QuestionsMarketplace, Inc., has recognized over time that a certain percentage of its customer accounts receivable will not be collected. To ensure the appropriate matching of revenues and expenditures in its financial reports, ...Simon owns stock that has declined in value since acquired. He has decided either to give the stock to his nephew, Fred, or to sell it and give Fred the proceeds. If Fred receives the stock, he will sell it to obtain the ...Surendra's personal residence originally cost $340,000 (ignore land). After living in the house for five years, he converts it to rental property. At the date of conversion, the fair market value of the house is $320,000. As ...What is the basis of the new property in each of the following exchanges? a. Apartment building held for investment (adjusted basis of $145,000) for office building to be held for investment (fair market value of ...The city of Richmond is going to condemn some buildings to build a park. Steve's principal residence is among those to be condemned. His adjusted basis for the house and land is $120,000. The appraised value of the house and ...
Post your question