Charles and Nicolette went to Italy in November 2008, where Charles proposed marriage and presented Nicolette with a diamond ring. She accepted the proposal and the ring. On the same day, Nicolette...

OSHA requires vehicles with an obstructed rear view to be equipped with a reverse signal alarm. Mr. Knight, an independent contractor working for Clarkson Construction, operated a Clarkson dump truck...

Cynthia Yeung owns 10% of the common shares of Bantam Brokers Ltd. She had acquired the shares, which have a stated paid-up capital amount of $1,000, from a previous shareholder in 20X0 at a cost of...

A landlord owned several residential properties, one of which was subject to a local rent control ordinance. The local rent control administrator determined that the landlord had been charging rents...

Jeremy took his mother on a special holiday to Mountain Air Resort. Jeremy was a frequent patron of the resort and was well known by its manager. The resort required each of its patrons to make a...

A Pentecostal nurse claims she was constructively discharged after refusing to assist in medical procedures she considered to be abortions because of her religious beliefs. She was initially...

Brown Corporation operates several trades and businesses. In the current year, Brown discontinues the operation of one of its trades and businesses. Brown is considering distributing to its...

In 2015, Ed, Fran, and George form Jet Corporation. Ed contributes land (a capital asset) having a $35,000 FMV purchased as an investment in 2011 for $15,000 in exchange for 35 shares of Jet stock....

Gobble Corporation purchased 400 acres in Green City to build a private golf course and residences. The land cost $10,000,000. Gobble planned high quality, large houses that would sell for an average...

Leisa Reed and Randell Thurman lived together in Spring City, Tennessee. Randell and his father, Leroy, formed a cattle-raising operation and opened a bank account in the name of L&R Farm. Within a...

Brian Hanson sustained a paralyzing injury while playing in a lacrosse match between Ohio State University and Ashland University. Hanson had interceded in a fight between one of his teammates and an...

Webster, Inc., dealt in automobile accessories at wholesale. Although he manufactured a few items in his own factory, among them windshield wipers, Webster purchased most of his inventory from a...

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

Assume that Del Rey files a lawsuit against La Grande Enchilada, claiming that his franchise was wrongfully terminated. What is the main factor that a court would consider in determining whether the...

Imagine the United States without federal deposit insurance. What are some of the mechanisms that would arise to punish bank managers who acted irresponsibly? In this chapter, you read about the...

Describe the three requirements for a valid acceptance.

Darlings Rent- a- Car carried property insurance on its cars under a policy issued by Philadelphia Indemnity Insurance Co. The policy listed Darlings as the insured. Darlings rented a car to Joshuah...

Managers are often concerned about the impact on reported profits of any actions recommended by the tax planning department. Explain why.

LaShawna Goodman went to a local Walmart store in Opelika, Alabama, to do some last minute holiday shopping. She brought along her two young daughters and a telephone she had purchased earlier at...

Lithuania Corporation operates a ferry service and owns four barges. Lithuania exchanges one of the barges with an adjusted basis of $350,000 for a used smaller barge with a FMV of $444,000 and a...

Pam and Susan own the PS Partnership. Pam takes care of daily operations and receives a guaranteed payment for her efforts. What amount and character of income will each partner report in each of the...

Ron and Hermione formed Wizard Corporation on January 2. Ron contributed cash of $200,000 in return for 50 percent of the corporation's stock. Hermione contributed a building and land with the...

Testator gives property to Tim in trust for Barneys benefit, providing that Barney cannot anticipate the income by assignment or pledge. Barney borrows money from Linda, assigning his future income...

If a firm engages in ethical behavior solely for the purpose of gaining profits from the goodwill it generates, the ethical behavior is essentially a means toward a self-serving end (profits and the...

New England Petroleum Corporation (NEPCO), a New York corporation, was in the business of selling fuel oil in the United States. PETCO, a refinery incorporated in the Bahamas, was a wholly owned...

Which, if any, of the following scenarios would support an employees claim of discrimination on the basis of national origin? a. A Dominican chambermaid in a hotel is denied promotion to front-desk...

Mary Vale contributed a bronze statuette to a local museum. Mary received the statuette as a gift from her grandmother 35 years ago, and her tax basis was only $200. However, the statues appraised...

Mario is a college student who had no income tax liability in the prior year and expects to have no tax liability for the current year. a. What steps should Mario take to avoid having amounts...

Locate the following Regulations, and give a brief topical description of each. Summarize your comments in an e-mail to your instructor. a. Reg. 1.170A-4A(b)(2)(ii)(C). b. Reg. 1.672(b)-1. c. Reg. ...

On March 1, Lucas called Craig on the telephone and offered to pay him $190,000 for a house and lot that Craig owned. Craig accepted the offer immediately on the telephone. Later in the same day,...

Stroud and Freeman are general partners in Strouds Food Center, a grocery store. Nothing in the articles of partnership restricts the power or authority of either partner to act in respect to the...

Hugill agreed to deliver shingles to W. I. Carpenter Lumber Co. and furnished a surety bond to secure the faithful performance of the contract on his part. After a breach of the contract by Hugill,...

Record owned a farm that was managed by his agent, Berry, who lived on the farm. Berry hired Wagner to bale the hay and told him to bill Record for this work. Wagner did so and was paid by Record. By...

The state of Arizona mandates emissions testing for cars before drivers can obtain updated registrations. The state hires a contractor to conduct the emissions tests in the various emissions-testing...

NTG Telecommunications, which was interested in purchasing a computer network for its office, received a promotional letter from IBM regarding IBMs PC Server 310, Small Business Solution, a computer...

Wiley and Gemma are neighbors. Wileys lot is extremely large, and his present and future use of it will not involve the entire area. Gemma wants to build a single-car garage and driveway along the...

Annabell and Eva own and manage Purity Forms Development. Annabells and Evas bases in Purity at the beginning of the year are $18,000 and $24,000, respectively. During the current year, Purity...

Joy Marcus owns several income-producing assets, including a stock portfolio and a small services proprietorship. She wants to start up a new corporation in the country Molto, where the income tax...

Read and summarize Technical Advice Memorandum 201014051.

On September 1, 20X6 Perfect Ltd., a steel recycling company, purchased 90% of the issued voting shares of Loser Ltd., a distributor of sportswear, from an arms length person. Loser Ltd. had incurred...

Mark Ramun worked as a manager for Allied Erecting and Dismantling Co., where he had a tense relationship with his father, who was Allied's president. After more than ten years, Mark left Allied,...

Wassenaar worked for Panos under a three-year contract stating that if the contract were terminated wrongfully by Panos before the end of the three years, he would pay as damages the salary for the...

1. In its opinion, the court pointed out that the duty to act in good faith does not apply to lenders seeking payment on demand notes. Why not? 2. If National City had demanded payment of the line...

Harvey is employed by the U.S. Customs Service. Early in the year, he accepts a position in the London office. In addition to a raise in his pay grade, the terms of the London assignment let Harvey...

Evaluate the progress and situation facing TTI in 2006. What should the company do? What should the investors/directors do?

In 2016, Christian wants to transfer as much as possible to his four adult married children (including spouses) and eight minor grandchildren without using any unified transfer tax credit. a. How...

Vette sued Aetna under a fire insurance policy. Aetna moved for summary judgment on the basis that the pleadings and discovered evidence showed a lack of an insurable interest in Vette. (An insurable...

Hanover leased a portion of his farm to Brown and Black, doing business as the Colorite Hatchery. Brown went upon the premises to remove certain chicken sheds that he and Black had placed there for...

a. When transaction costs are low enough, efficient resource allocation will follow regardless of the particular assignment of property rights. When transaction costs are high enough, efficient...

You plan to open a store in Chicago, specializing in rugs imported from Turkey. You will work with a native Turk who will purchase and ship the rugs to your store. You are wise enough to insist on a...

Joli receives a letter from Kerin, saying that he has a book at a certain price. Joli signs and returns the letter to Kerin. When Kerin delivers the book, Joli sends it back, claiming that they do...

Martel, a competent male secretary to the president of ICU, was fired because the new president of the company believed it is more appropriate to have a female secretary. (a) Has a violation of the...

Fred, a U.S. citizen, arrives in Country K on July 15, 2012, and proceeds to a construction site in its oil fields. Once there, he moves into employer provided housing where he is required to reside....

Donald Petersen joined his father, William Petersen, in a chicken hatchery business William had previously operated as a sole proprietorship. When the partnership was formed, William contributed the...

Shade asked Dow to give him a check for $100 in return for Shades delivery the next day of a television set. Dow gave the check, but Shade never delivered the television set. Does Dow have a defense...

Shalom Malul contracted with Capital Cabinets, Inc., in August 1999 for new kitchen cabinets made by Holiday Kitchens. The price was $10,900. On Capitals recommendation, Malul hired Barry Burger to...

Melvin J. Ford, president of International Loan Network, Inc. (ILN), promoted ILNs financial enrichment programs to ILN members and prospective members with evangelical fervor at revival-style...

Clarence Morgan, Jr., owned Easy Way Automotive, a car dealership in DLo, Mississippi. Easy Way sold a truck to Loyd Barnard, who signed a note for the amount of the price payable to Trustmark...

Dr. Graham Wood purchased a cashiers check in the amount of $ 6,000 from Central Bank of the South (Bank). The check was made pay-able to Ken Walker and was delivered to him. Eleven months later,...

List an advisors duties that are excluded under the AICPAs Statements on Standards for Tax Services.

Siva Nathaniel owns various plots of land in Fulton County, Georgia. He acquired the land at various times during the last 20 years. About every fourth year, Siva subdivides into lots one of the...

Robert McCart owned and operated an H&R Block tax preparation franchise. When Robert became a district manager for H&R Block, he was not allowed to continue operating a franchise. So, in accordance...

Cornelia and Ed Kornfeld contracted to sell a signed Picasso print to David Tunick, Inc. The print, entitled Le Minotauromachie, was signed Pablo Picasso. The signature on the print was discovered to...

What methods of security through obscurity does your school employ? How do these methods increase security? How do they decrease security?

Terry Kunkle and VanBuren High hosted a Christmas party in Berkeley County, South Carolina. Guests had drinks and hors doeuvres at a residence and adjourned to dinner in a barn across a public road....

Construct a scenario in which the tax adviser should recommend that the client terminate an IRS challenge with the following: a. Lawsuit b. Offer in compromise c. Closing agreement d. Appeals...

On December 20 of the current year, Winneld has decided to sell all of the stock that she owns and reinvest the proceeds in state of Minnesota bonds. Without considering the sales, her taxable income...

The gross estate of Raul, decedent, includes stock in Iris Corporation (E & P of $3 million) valued at $2.5 million. At the time of his death in 2013, Raul owned 60% of the Iris stock outstanding,...

Richard Hopkins, a 61-year-old employee of the city of Independence, Missouri, was diagnosed with a heart condition that prevented him from driving for six months. Driving was an essential function...

A large number of cases involve a dispute about whether a mistake was mutual or unilateral concerning the quality of the object or its value. In a famous case, Sherwood v. Walker; 66 Mich. 568, 33...

What potential claims could Sarah assert against her employer? What defenses should the employer raise?

Redfern Corporation, a calendar year taxpayer, has been an S corporation for several years. Rod and Kurt each own 50% of Redferns stock. On July 1 of the current year (assume a non-leap year),...

On June 15, 2014, Sheridan filed his 2013 income tax return reflecting a tax of $10,500. On October 5, 2015, he filed an amended 2013 return showing an additional $6,400 of tax, which he paid with...

Courts Distributors needed two hundred compact refrigerators on a rush basis. It contacted Eastinghouse Corporation, a manufacturer of refrigerators. Eastinghouse said it would take some time to...

Your company, Acme Widgets, sells its widgets worldwide. Acme has a contract for 250,000 widgets to be shipped to the Czech Republic. The price stated in the offer and acceptance is $1 per widget,...

Defendant Park, the president of a national food-chain corporation, was charged, along with the corporation, with violating the Federal Food, Drug, and Cosmetic Act by allowing food in the warehouse...

Teal Corporation, with E & P of $2 million, distributes property with a basis of $150,000 and a fair market value of $400,000 to Grace. She owns 15% of the outstanding Teal shares. a. What are the...

Dr. Quinn, Dr. Rose, and Dr. Tanner are dentists who practice as equal owners of QRT Dental Services. A patient of Dr. Roses recently sued him for medical malpractice and was awarded a $500,000...

Paul owns a building used in his business with an adjusted basis of $340,000 and a $750,000 FMV. He exchanges the building for a building owned by David. Davids building has a $950,000 FMV but is...

Agnew Corporation operates a small manufacturing business. During Year 1 (its first tax year, which is 12 months long), Agnew sells goods for $3.8 million for which the cost of goods sold is $2.8...

Toyland Corporation, an S corporation, uses the calendar year as its tax year. Bob, Alice, and Carter own 60, 30, and 10 shares, respectively, of the Toyland stock. Carters basis for his stock is...

Kerr Steamship Company sent a telegram at a cost of $26.78 to the Philippines through the Radio Corporation of America. The telegram, which contained instructions in unintelligible code for loading...

Joc Oil bought a cargo of fuel oil for resale. The certificate from the foreign refinery stated the sulfur content of the oil was 0.5 percent. Joc Oil entered into a written contract with Con Ed for...

Assume you are a CPA. A new client, Mark, a local chiropractor, has brought you the financial information for his business at the close of the past year. Previously, Mark prepared his own tax returns...

Andy has operated his moving company, MoveOn, as a sole proprietorship for several years. In 2015, MoveOn placed into service $20,000 of property qualifying for immediate expensing under 179. In...

Hello-Hello is a U.S. telecommunications company with global operations. Sophia is an assistant vice president of Hello-Hello. She is dispatched to China to handle two situations. First, a shipment...

On January 10, 2015 Kirsten married Joe. Joe sold his personal residence on October 25. 2014 and excluded the entire gain of $175.000. Although they had originally planned to live in the house that...

ETHICS: Richard and Michelle Kommit traveled to New Jersey to have fun in the casinos. While in Atlantic City, they used their MasterCard to withdraw cash from an ATM conveniently located in the pit,...

1. The court based part of its decision on the fact that FedExs conduct spoke louder than its words. Is there any way that words can un-do conduct? No matter what the conduct is, can words override...

John Sheridan owned a Marathon gas station franchise. He sued Marathon Petroleum Co. under Section 1 of the Sherman Act and Section 3 of the Clayton Act, charging it with illegally tying the...

Grouse Corporation, a calendar year C corporation, had taxable income of $1.4 million, $1.2 million, and $700,000 for 2012, 2013, and 2014, respectively. Grouse has taxable income of $1.6 million for...

Prance, Inc., earns pretax book net income of $800,000 in 2014. Prance acquires a depreciable asset in 2014, and first-year tax depreciation exceeds book depreciation by $80,000. Prance reported no...

Maggie could not conceive a child using natural means, so she sought out a woman who would donate an egg to be surgically implanted in Maggie. Which of the following items are deductible by Maggie in...

In each of the following independent situations, indicate whether the transfer is subject to the Federal gift tax. a. Asa contributes to his mayor's reelection campaign fund. The mayor has prom ised...

You and a former classmate started a computer software company five years ago. Originally, the two of you were the owners and only employees. The foundation of your company was your combined...

Reginald Delaney managed a Taco Time restaurant in Portland, Oregon. Some of his customers told Mr. Ledbetter, the district manager, that they would not be eating there so often because there were...

Dr. Citrin had an agreement with Dr. Mehta for Mehta to work in Citrin's medical offices to see his patients when he was on vacation. While Citrin was on vacation, Mehta saw a patient and...

Nina was getting ready to go to a party and could not find her bracelet. She remembered wearing it last weekend and taking it off at a bar to show to friends. Her memory of the remainder of that...

1. Do you think that the law strikes a fair balance between the rights of parties with respect to found property? Why or why not? 2. Do the different standards of care that apply to bailed goods...

Use Checkpoint to answer the following questions regarding the ability to expense advanced mine safety equipment. a. Using expense mine safety equipment as keywords (not in quotation marks), search...