Integrated, Inc., entered into a contract with the state of California to construct a building. It then subcontracted the electrical work to Alec Fergusson Electrical Contractors. The subcontract was...

The Sterling Trust owns a business and generated $100,000 in depreciation deductions for the tax year. Mona is one of the income beneficiaries of the entity. Given the following information, can Mona...

Brigham is single and is in the 33% marginal income tax bracket. He has the sales or exchanges below. At the beginning of the year, he has nonrecaptured net Sec. 1231 losses of $10,000. Determine the...

Zeta Corporation reports the following results for Year 1 and Year 2: The adjusted taxable income is before Zeta claims any charitable contributions deduction, NOL or capital loss carryback,...

Early this year, a taxpayer was clearing dry brush from behind his Malibu home in California. He became frustrated with how long it was taking using his clippers. He decided instead to light the...

Multiple Choice Question 1. In which case is a plaintiff most likely to sue based on strict liability? A. Defamation B. Injury caused on the job C. Injury caused by a tiger that escapes from a zoo D....

Which standard of scrutiny, or test, would apply to this situation? Why? A state legislature enacted a statute that required any motorcycle operator or passenger on the states highways to wear a...

How would the court most likely rule on Scotts employee status? James Blatt hired Marilyn Scott to sell insurance for the Massachusetts Mutual Life Insurance Co. Their contract stated, Nothing in...

How do organizations create a culture of honesty, openness, and assistance?

Bruitrix held a bill of lading covering a shipment of washing machines that it had purchased. The washing machines were placed into a bonded warehouse operated by the British Transport Commission....

Determine the amount of the standard deduction allowed for 2014 in the following independent situations. In each case, assume that the taxpayer is claimed as another person's dependent. a. Curtis,...

Tobey was late in filing his federal income tax refund claim, but he requested an extension of the statute of limitations, citing the financial-disability exceptions of I. R. C. 6511(h). Tobeys...

Jarold Daniel Friedman worked as a temporary computer contractor for a pharmaceutical warehouse. The warehouse offered him a permanent position, but the warehouse required that he get a mumps...

Max Coen is employed as a full-time police officer by the Memphis Police Department. He is required to abide by the departments rules of conduct, which apply whether he is on-duty or off-duty. With...

Melon Corporation, which is owned equally by four individual shareholders, adopts a plan of liquidation for distributing the following property: Land (a capital asset) having a $30,000 FMV and a...

Your client, Karen Kross, recently married Larry Kross. Karen is age 72, quite wealthy, and in reasonably good health. To date, she has not made any taxable gifts, but Larry made taxable gifts...

Suppose that the California legislature passes a law that severely restricts carbon dioxide emissions from automobiles in that state. A group of automobile manufacturers files suit against the state...

ABCD Company is a general partnership. It consists of Dianne, Greg, Knox, and Laura, whose capital contributions were as follows: Dianne = $5,000, Greg = $7,500, Knox = $10,000, and Laura = $5,000....

Worth H. Percivil, a mechanical engineer, was employed by General Motors (GM) for twenty-six years until he was discharged. At the time his employment was terminated, Percivil was head of GMs...

Steve and Marie Venturini were involved in the operation of Steves Sizzling Steakhouse in Carlstadt, New Jersey, from the day their parents opened it in the 1930s. By the 1980s, Steve, Marie, and her...

Sheldon Corporation reports regular taxable income of $150,000 in the current year. Its regular tax is $41,750. Sheldon takes into account the following facts when calculating the $150,000 amount. ...

Voyles Corporation, a calendar year taxpayer formed five years ago, desires to make an S election beginning in 2015. Sue and Andrea each own one-half of the Voyles stock. a. How does Voyles make the...

Jacobs Builders entered into a contract with Kent to build him a home. The agreement stated that Jacobs would use only certain brand-name materials. Upon completion of the home, Kent discovered that...

On November 10 of year 1 Javier purchased a building, including the land it was on, to assemble his new equipment.The total cost of the purchase was $1,200,000; $300,000 was allocated to the basis of...

Hawkeye Company reports current E&P of $300,000 this year and accumulated E&P at the beginning of the year of $200,000. Hawkeye distributed $400,000 to its sole shareholder, Ray Kinsella, on December...

You have an employee who has a chemical imbalance in the brain that causes him to be severely emotionally unstable. The medication that is available to treat this schizophrenic condition is extremely...

Emily was a Java programmer employed with Sun Microsystems in Palo Alto, California. Upon beginning employment, Emily signed a contract that included a noncompete clause that prevented her from...

Mae contracted to sell one thousand bushels of wheat to Lloyd at $5.00 per bushel. Just before Mae was to deliver the wheat, Lloyd notified her that he would not receive or accept the wheat. Mae sold...

Rosinoff and his wife, who were business partners, entered bankruptcy. A creditor, Baldwin, objected to their discharge in bankruptcy on the grounds that (a) The partners had obtained credit from...

New England Rock Services, Inc., agreed to work as a subcontractor on a sewer project on which Empire Paving, Inc., was the general contractor. For drilling and blasting a certain amount of rock,...

Suppose that a seller has not bothered to investigate whether her house has termites; so, she does not know. When asked by a buyer if it does, she says, I guess not. On efficiency grounds, should...

Dave Conley, a longtime heavy smoker, was diagnosed with lung cancer. He died two years later. His death certificate stated that the cause of death was cancer, but it also noted other significant...

Morris, a salesperson for Acme, Inc., a manufacturer of household appliances, receives a commission on all sales made and no further compensation. He drives his own automobile, pays his own expenses,...

Discuss the validity and effect of each of the following: (a) A, B, and C, manufacturers of stereos, orally agree that due to the disastrous, cutthroat competition in the market, they will establish...

Was Johansen granted a durable power of attorney or a health-care power of attorney for Ramish? Explain. Had Ramish created a living will? In June 2007, Bernard Ramish set up a $48,000 trust fund...

Brenner was in the scrap iron business. Almost daily, Plitt lent Brenner money with which to purchase scrap iron. The agreement of the parties was that when the scrap was sold, Plitt would be repaid...

Greif Brothers Corporation, a steel drum manufacturer, owned and operated a manufacturing plant in Youngstown, Ohio. In 1987, Lowell Wilson, the plant superintendent, hired Youngstown Security...

What is the difference between the definition of a proportionate non-liquidating distribution and a proportionate liquidating distribution? What is the significance of the word proportionate ?

Is the bystander rule immoral? What are the differences between law and morality?

The Snyder Mfg. Co., being a large user of coal, entered into separate contracts with several coal companies. In each contract it was agreed that the coal company would supply coal during the entire...

Albert, Betty, and Carol own and operate the Roy Lumber Company. Each contributed one-third of the capital, and they share equally in the profits and losses. Their partnership agreement provides that...

Piper High School in Piper, Kansas, a town located about 20 miles west of Kansas City, experienced national attention because of questions about students and their term papers for a botany class....

Janet Moody is one of XZY Companys most trusted employees. She never complains about her work and rarely misses work due to illness or vacation. The company has been successful over the years, but is...

Thomas Tille owned M. A. T. T. Equipment Co. To operate the business, Tille borrowed funds from Union Bank. For each loan, Union filed a financing statement that included Tilles signature and...

The Johns-Manville Corporation made a variety of building and other products. It was a major producer of asbestos, which was used for insulation in buildings. It has been medically proven that...

HiramCo, a U.S. entity, operates a manufacturing business in both Mexico and Costa Rica, and it holds its investment portfolio in Sweden. How many foreign tax credit computations must HiramCo make?...

Brendan Coleman created and marketed Clinex, a software billing program. Later, Retina Consultants, P. C., a medical practice, hired Coleman as a software engineer. Together, they modified the Clinex...

Warwick, Inc., a U.S. corporation, owns 100% of NewGrass, Ltd., a foreign corporation. NewGrass earns only general limitation income. During the current year, New Grass paid Warwick a $10,000...

Hank sells equipment used in a trade or business for $25,000. The equipment costs $30,000 and has an adjusted basis of $25,500. Why is it important to know the holding period?

Zeta Corporations taxable income for 2014 was $1.5 million, on which Zeta paid federal income taxes of $510,000. Zeta estimates calendar year 2015s taxable income to be $2 million, on which it will...

How might the result in this case have been different if the court had admitted the Wagners evidence of the Love Song contract?

A homosexual employee files a claim for invasion of privacy against his employer who shared with co-workers the fact that the employees male partner was listed on his insurance policy and pension...

Defendant Laffal was the president of a corporation that operated a restaurant. It was alleged that prostitutes frequented the restaurant, picking up men there and returning them after a short time,...

Ann Elkin, who works for Brill Co., has been sent out to conduct two customer evaluations, which have gone much more quickly than Ann anticipated. Her supervisor does not expect Ann back until after...

Advent purchased ink from Borden. On the labels of the ink drums delivered to Advent, Borden had imprinted in one-sixteenth-inch type in all caps: SELLER MAKES NO WARRANTY, EXPRESS OR IMPLIED,...

Before her death in early 2015, Katie made the following transfers. In 2008, purchased stock in Green Corporation for $200,000 listing title as follows: "Katie, payable on proof of death to my son...

In each of the following independent cases, determine the amount of the charitable contribution and the limitation that would apply. In each case, assume that the donee is a qualified public charity....

Jerry transfers property with a $28,000 adjusted basis and a $50,000 FMV to Texas Corporation for 75 shares of Texas stock. Frank, Jerrys father, transfers property with a $32,000 adjusted basis and...

You're in line at the movie theater when you overhear a stranger say: "The FDA has just approved Hernstrom's new painkiller. When the announcement is made on Monday, Hernstrom stock will take off."...

John Mason operates a consulting business, Mason Enterprises, as a sole proprietorship. He had to transfer $100,000 of stocks and securities into Mason Enterprises's name to show financial viability...

Assume Timberline Corporation's 2017 taxable income of $240,000 for purposes of computing the 179 expense. It acquired the following assets in 2017: a) What is the maximum amount of 179 expense...

Jan Voda, M.D., a resident of Oklahoma City, Oklahoma, owns three U.S. patents related to guiding catheters for use in interventional cardiology, as well as corresponding foreign patents issued by...

WHAT IF THE FACTS WERE DIFFERENT? Suppose that Fisher had not ultimately obtained the properties (through Antonio and the assignment) and had shown no further interest in the properties after he had...

Robert and Susan (both 39) are married and have 2 children. Their son, Dylan, is 8 and their daughter, Harper, is 3. Susan sells pharmaceuticals for the Bendigo Drug Company. Robert is a teacher at...

KNB sold real property to Firm P for $15,000 cash and Firm Ps assumption of the $85,000 mortgage on the property. a. What is KNBs amount realized on sale? b. Compute KNBs after-tax cash flow from the...

The rungs of ladders must be constructed to support the weight of the people who climb them. Compare the relative efficiency of a precise government standard for all ladders concerning the weight...

In 2009, Capitol Records sued Jammie Thomas Rasset for damages after she was found liable for copyright violations when she illegally downloaded 24 songs off the Internet. Apparently, in addition to...

Mr. G is the CFO of Petro Inc. This year, his salary was $625,000. Petro paid him $500,000 during the year and accrued an unfunded liability to pay him the $125,000 balance in the year he retires at...

Dr. Stephen Kolbert is a professor of television and movie production at Hollywood University (and thus an employee of the university). He often meets with his doctoral students, who call him Dr. K,...

Mr. and Mrs. Boaz le a joint return on which they claim their four children (all over age 14) and Mr. Boazs mother as dependents. Their AGI is $134,300, and they have the following itemized...

Does Sec. 351 require shareholders to receive stock equal in value to the property transferred? Suppose Fred and Susan each transfer property worth $50,000 to Spade Corporation. In exchange, Fred...

Dave and his friend Stewart each own 50 percent of KBS. During the year, Dave receives $75,000 compensation for services he performs for KBS during the year. He performed a significant amount of work...

Thomas Stafford owned four promissory notes. Payments on the notes were deposited into a bank account in the names of Stafford and his daughter, June Zink, jointly with a note on the account...

Under the common law, what would each plaintiff be required to identify in order to be given relief by the court? In the late 1980s, residents of Lake Caliopa, Minnesota, began noticing an unusually...

Federal law requires most interstate truckers to obtain a permit that reflects compliance with certain federal requirements. The 1965 version of the law authorized states to require proof that a...

Twentieth Century Fox (Fox) owned and distributed the successful motion picture The Commitments. The film tells the story of a group of young Irish men and women who form a soul music band. In the...

Sally Fitch obtained a loan from Buffalo Federal Savings and Loan Association (Buffalo Federal). She signed a promissory note for $ 130,000 with interest at 17 percent. The loan was secured with a...

Burl Brunson purchased a parcel of real property in Newark, New Jersey. The deed for the property was properly recorded and indexed by the county recorder. Subsequently, Brunson borrowed $ 50,000...

In 2013, Mr. Dale paid $47,600 for 3,400 shares of GKL Mutual Fund and elected to reinvest dividends in additional shares. In 2013 and 2014, he received Form 1099s reporting the following: a. If Mr....

Riley Fontaine has requested that you review the calculation of his 20X1 net income for tax purposes. He has provided you with the following information: 1. His salary consists of the following: The...

Determine the amount of Earned Income Credit in each of the following cases. Assume that the person or persons is/are eligible to take the credit. Calculate the credit using the formulas. a) A single...

Ronald Armstead worked for First American Bank as a courier. His duties included making deliveries between the banks branches in Washington, D.C. Armstead parked the banks station wagon near the...

Cynthia Stafford worked as an administrative professional at Gerber & Gerber, P.C. (professional corporation), a law firm, for more than two years. During that time, she stole ten checks payable to...

Why do you think that NCR did not want its claims decided by arbitration? In 1884, John H. Patterson founded the National Cash Register Company (NCR), maker of the first mechanical cash registers. In...

THE ETHICAL DIMENSION The appellate court noted in this case that the district courts decisionwhich granted benefits to Evansmight arguably have been a better decision under the facts. If the court...

When Kayla Caldwell got a job as a cashier at a Costco store, she wore multiple pierced earrings and had four tattoos, but she had no facial piercings. Over the next two years, Caldwell engaged in...

Dianne Rawlinson, 22 years old, was a college graduate whose major course of study was correctional psychology. After graduation, she applied for a position as a correctional counselor (prison guard)...

Kelly Corporation makes a liquidating distribution. Among other property, it distributes land subject to a mortgage. The mortgage amount exceeds both the adjusted basis and FMV for the land. Explain...

Hank started a new business in June of last year, Hank's Donut World (HW for short). He has requested your advice on the following specific tax matters associated with HW's first year of operations....

Jackson Corporation prepared the following book income statement for its year ended December 31, 2014: Information on equipment depreciation and sale: Equipment 1: Acquired March 3, 2012 for...

Jones and Wilson were on trial, separately, for larceny of a $1,000 bearer bond (payable to the holder of the bond, not a named individual) issued by Brown, Inc. The Commonwealths evidence showed...

Carolyn Falgout accompanied William Wardlaw as a social guest to Wardlaws brothers camp. After both parties had consumed intoxicating beverages, Falgout walked onto a pier that was then only...

A contractor departed from the specifications at a number of points in a contract to build a house. The cost to put the house in the condition called for by the contract was approximately $14,000....

Lightle, a real estate agent in Anchorage, listed a house for sale by the Leighs. The Williamses made an offer to buy the house, and the offer was accepted, conditional on their obtaining a mortgage....

Dewayne Hubbert, Elden Craft, Chris Grout, and Rhonda Byington bought computers from Dell Corp. through its Web site. Before buying, Hubbert and the others configured their own computers. To make a...

Continue with the GAB LLP and balance sheet shown in Problem 45, assuming instead that Gina sells her partnership interest to Jess for $140,000 of cash. a. What is the amount and character of Ginas...

Ralph is a systems analyst for the Silicon Corporation, a major defense contractor. When Ralphs co-workers learn that he has AIDS, six of them quit work immediately. Fearing that additional...

Last year, a shareholder transferred land (basis of $650,000, fair market value of $575,000) to Roadrunner Corporation in a 351 transaction. This was the only property transferred to Roadrunner at...

Thomas Corporation transfers to Andrews Corporation all its assets and $100,000 of its liabilities in exchange for Andrews voting common stock, having a $600,000 FMV, in a merger in which Thomas...

McLaughlin borrowed $1,000 from Adler, who, apprehensive about McLaughlins ability to pay, demanded security. McLaughlin indorsed and delivered to Adler a negotiable promissory note executed by...