The Investment Company Act of 1940 prohibits a mutual fund from engaging in certain transactions in which there may be a conflict of interest between the manager of the fund and its shareholders....

A Volkswagen on a highway in Dallas was hit from behind and pushed into a truck parked on the side of a freeway. One person in the VW was injured and one was killed. The survivor sued VW, contending...

Should the fact that an out-of-state corporation pays affiliates in a state to direct consumers to its Web site be sufficient to require the corporation to collect taxes on Web sales to state...

Wilbert Heikkila listed eight parcels of real property for sale. David McLaughlin submitted written offers to purchase three of the parcels. Three printed purchase agreements were prepared and...

James W. Newton Jr. is an accomplished avant garde jazz composer and flutist. Newton wrote a composition for the song Choir, a piece for flute and voice that incorporated elements of African American...

Polly Ling is a successful professional golfer. She is a resident of a country that does not have a tax treaty with the United States. Ling plays matches around the world, about one-half of which are...

Four Pillars Enterprise Co. is a Taiwanese company owned by Pin Yen Yang. Avery Dennison, Inc., a U.S. corporation, is one of Four Pillars chief competitors in the manufacture of adhesives. In 1989,...

During an interview, an employer asks a female applicant questions such as whether she had children, what her child care responsibilities were, and how her family felt about her weekly commute...

On September 30, Silver Corporation, a calendar year taxpayer, sold a parcel of land (basis of $400,000) for a $1 million note. The note is payable in five installments, with the first payment due...

Chris Mac, a local CPA, is a self-employed tax return preparer. Chris works from home in a room that is exclusively used on a regular basis as the principal place of business. Last year, Chris built...

Nancy and the Minor Corporation own bonds of the East Corporation. Minor Corporation owns 80% of the stock of East Corporation. East Corporation has declared bankruptcy this year, and bondholders...

On November 9, Jane Jones writes a check for $5,000 payable to Ralph Rodgers in payment for goods to be received later in the month. Before the close of business on November 9, Jane notifies the bank...

Could the parties have used a short-form merger procedure in this situation? Why or why not? In November 2002, Mario Bonsetti and Rico Sanchez incorporated Gnarly Vulcan Gear, Inc. (GVG), to...

In the Clean Air Act, Congress allowed California, which has particular problems with clean air, to adopt its own standard for emissions from cars and trucks, subject to the approval of the...

A new phenomenon for admissions to MBA programs is hiring consultants to help applicants hone their applications. About 20 percent of those who apply to the top MBA programs have hired consultants at...

Lee is an officer of Magma Oil, Inc. Lee knows that a Magma geologist has just discovered a new deposit of oil. Can Lee take advantage of this information to buy and sell Magma stock? Why or why not?

Apricot.com is a major software developer that licenses software to be used over the Internet. One of its programs, called Match, is a search engine that searches personal ads on the Internet and...

Roberta is an accountant employed by a local firm. During the year, Roberta incurs the following unreimbursed expenses: Item Amount Travel to client locations . $750 Subscriptions to professional...

National Bond and Investment Company sent two of its employees to repossess Whithorns car after he failed to complete the payments. The two repossessors located Whithorn while he was driving his car....

International Yogurt Co. (IYC) developed a unique mix for making frozen yogurt and related products. Morris and his wife purchased a franchise from the company but were not told that a franchise was...

Carriage Homes, Inc. was a general contractor that built multifamily residential and land-development projects in Minnesota. John Arkell was Carriage Homes chief executive officer, president, and...

Rolf owns 20% of Chaminade Corporation. During the current year, Chaminade reports operating income of $240,000 and pays $60,000 in cash dividends. Identify the tax issue(s) posed by the facts...

1. Does Dumas have a valid employment discrimination claim? 2. If so, what theories would be best advanced by Dumas?

Teamsters Union (Teamsters) began a campaign to organize the employees at a Sinclair Company (Sinclair) plant. When the president of Sinclair learned of the Teamsters drive, he talked with all of his...

Mr. Boyd and Ms. Tuck decide to form a new corporation named BT Inc. Mr. Boyd transfers $10,000 cash and business inventory ($20,000 FMV; adjusted tax basis $3,200), and Ms. Tuck transfers business...

a. Define the term scholarship as it is used in Sec. 117. b. If a scholarship covers room and board, is it excludable? c. If an employer provides a scholarship to an employee who is on leave of...

Franks Maintenance and Engineering, Inc., orally ordered steel tubing from C.A. Roberts Co. for use in the manufacture of motorcycle front fork tubes. Because these front fork tubes bear the bulk of...

Onondaga Bureau of Medical Economics (OBME), a collection agency for physicians, sent plaintiff Seabrook a letter demanding payment for a $198 physicians bill. In addition to demanding payment, the...

The fourth largest crop in the United States is alfalfa, of which 5 percent is exported to Japan. Round Up Ready alfalfa is genetically engineered to resist glyphosate, the active ingredient in the...

Using the legend provided below, classify each statement as to the taxpayer for dependency exemption purposes. Legend QC = Could be a qualifying child QR = Could be a qualifying relative B = Could...

Weinstein, Inc. orders four Lear jets from Johnson Aerospace Co., for an agreed price of $295,000 per jet. The contract for the purchase of the jets is 10 pages long, with complete specifications as...

Mark and Pamela are equal partners in MP Partnership. The partnership, Mark, and Pamela are calendar year taxpayers. The partnership incurred the following items in the current year: a. Compute the...

TriStateCo, an Idaho corporation, has operated landfills in Washington (WA), Idaho (ID), and Oregon (OR) for the past 20 years. The states are changing their environmental laws governing landfills,...

Neptune Research & Development, Inc. (the buyer), which manufactured solar-operated valves used in scientific instruments, saw advertised in a trade journal a hole-drilling machine with a very high...

Should only banks and regulated financial institutions be allowed to issue ATM cards? Why or why not?

Rephrase the following sentences using nonsexist language. A paralegal may draft a letter to the client informing him of an upcoming hearing. The lawyer must file his response within 30 days. The...

On Thursday, Justin flies from Baltimore (his home office) to Cadiz (Spain). He conducts business on Friday and Tuesday; vacations on Saturday, Sunday, and Monday (a legal holiday in Spain); and...

Complete the following chart, indicating the comparative attributes of the typical simple trust and complex trust by answering yes/no or explaining the differences between the entities where...

For five years, Henry and James had been engaged as partners in building houses. They owned the equipment necessary to conduct the business and had an excellent reputation. In March, Joyce, who had...

In 1994, Gary Kremen registered the domain name sex.com with Network Solutions, Inc., to the name of Kremens business, Online Classifieds. Later, Stephen Cohen sent Network Solutions a letter that he...

Trudy comes to Pat, her supervisor, and tells her that Jack has been sexually harassing her by making suggestive remarks, comments, and jokes; constantly asking her for dates; and using every...

Are subrogation clauses efficient? Be sure to review your answer in light of the section below about litigation costs and their effect on the efficiency of the tort liability system.

In the movie contract, which side was the more successful negotiator? Can you think of any terms that either party left out? Are any of the provisions unreasonable?

Jefferson is a grade school teacher whose annual income from teaching is $30,000. He has always enjoyed bowling, and his local pro urged him to turn professional. He subsequently begins working for...

The client owns a clothing store. She has questions concerning what constitutes an offer and an acceptance. Refer to the Uniform Laws Annotated, Master Edition. What uniform law governs this...

Steve is an usher at his local church. Can he deduct commuting expenses for the Sundays that he is assigned to usher for church services?

Assume the facts of Problem 27. In each independent case, are additional planning opportunities available to the partnership to maximize its inside basis in its assets? If so, by how much can the...

Mr. A, who is in a 35 percent marginal tax bracket, must decide between two investment opportunities, both of which require a $50,000 initial cash outlay in year 0. Investment 1 will yield $8,000...

The purpose of this problem is to enhance your skills in interpreting the authorities that you locate in your research. In answering the questions that follow, refer only to Thomas A. Curtis, M.D.,...

Nils Corporation, a calendar year taxpayer, adopts a plan of liquidation on April 1 of the current year. The final liquidating distribution occurs on January 5 of next year. Must Nils Corporation...

Beth died on May 8, 2015. Her executor elected date-of-death valuation. Beths gross estate included, among other properties, the items listed below. What is the estate tax value of each item? a....

Antonio and Michaela are equal partners in A&M Booking Services. Antonio manages the business and receives $40,000 per year for his management services. He and Michaela each withdraw $30,000 in cash...

Candy owns 40% of the stock of Park, Inc., an S corporation. Her stock basis is $25,000, and she loaned $10,000 to the corporation during the year. How much of Park's $100,000 operating loss can...

Distinguish between a broad and narrow formulation of an issue. Describe the elements of a narrow statement of an issue. Why is it important to phrase an issue narrowly when engaged in legal writing?

James F. Kost filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code. First Interstate Bank of Greybull (First Interstate) held a first mortgage on the debtors residence near...

Compute the 2016 standard deduction for the following taxpayers. a. Margie is 15 and claimed as a dependent by her parents. She has $800 in dividend income and $1,400 in wages from a part-time job....

In 2014, Carson is claimed as a dependent on his parent's tax return. His parents' ordinary income marginal tax rate is 28%. Carson's parents provided most of his support. What is Carson's tax...

In year 1, Peter and Shaline Johnsen moved into a home in a new subdivision. Theirs was one of the first homes in the subdivision. In year 1, they paid $1,500 in real property taxes on the home to...

Alfonso began the year with a tax basis in his partnership interest of $30,000. His share of partnership debt at the beginning and end of the year consists of $4,000 of recourse debt and $6,000 of...

ETHICS: Texaco, Inc., and other oil companies sold mineral spirits in bulk to distributors, which then resold to retailers. Mineral spirits are used for cleaning and are harmful or fatal if...

Daniel agreed to erect an apartment building for Steven for $12 million and that Daniel would suffer a deduction of $12,000 per day for every day of delay. Daniel was twenty days late in finishing...

Fred Schilling, the president and administrator of Florence General Hospital, made a contract, dated August 16, 1989, on behalf of the hospital with CMK Associates to transfer the capacity to utilize...

Look at the various fraud statistics earlier in this chapter. Determine the characteristics of the person most likely to perpetrate a large fraud. Then, debate your decision over a person with these...

The management of AAAA Company has observed that the companys cash outflows have been increasing much more rapidly than its inflows. Management cannot understand the change; from its perspective, it...

During the audit of a manufacturing client, you are instructed to do vertical and horizontal financial statement analyses. In your analyses, you notice little increase in the clients overall...

Differentiate an interpretive regulation and a legislative regulation.

Jane Lane refinanced her mortgage with Central Equity, Inc. Central Equity split the transaction into two separate loan documents with separate Truth-in-Lending disclosure statements and settlement...

Suppose a firm is equally likely to earn $2 million this year or lose $3 million. The firm faces a tax rate of 40% on each dollar of taxable income, and the firm pays no taxes on losses. In this...

Sanders agreed in writing to write, direct, and produce a motion picture on the subject of lithography (a method for printing using stone or metal) for the Tamarind Lithography Workshop. After the...

Esther owns a large home on the East Coast. Her home is surrounded by large, mature oak trees that significantly increase the value of her home. In August 2014, a hurricane damaged many of the trees...

Reynaldo and Sonya, a married couple, had flood damage in their home due to a faulty water heater during 2016, which totally ruined the furniture that was stored in their garage. The following items...

Suppose that Cruz had misaddressed the envelope but the summons had still reached Hayes and Cruz could prove it. Would this have been sufficient to establish valid service? Explain.

WHAT IF THE FACTS WERE DIFFERENT? Suppose that the court had accepted Charter Ones argument that a cashiers check should be treated as a note and the bank had presented proof of fraud in the...

A limited liability company (LLC) sold a Manhattan apartment building that it owned. The owners of 25 percent of the membership interests in the LLC filed a lawsuit on behalf of the LLCcalled a...

Vtech, a calendar year C corporation, has accumulated E & P of $2,900,000 as of January 1, 2016. Its current E & P for 2016 is $845,000, and it has reasonable business needs of $3,600,000. Vtechs...

On July 5, 2005, Dr. Smriti Nalwa took her nine-year-old son and six-year-old daughter to Great America amusement park in California where they went on the parks Rue le Dodge bumper car ride. The...

1. a. Explain why the court concluded that destination skiers at Deer Valley or at Deer Valleys mid-mountain village constitute a market separate from ski rental outlets in nearby Park City. b. How...

A sculpture that Korliss Kane held for investment was destroyed in a flood. The sculpture was insured, and Korliss had a $60,000 gain from this casualty. He also had a $17,000 loss from an uninsured...

Lucy and Zehmer met while having drinks in a restaurant. During the course of their conversation, Lucy apparently offered to buy Zehmers 471.6-acre farm for $50,000 cash. Although Zehmer claims that...

Williamson, her mortgage in default, was threatened with foreclosure on her home. She decided to sell the house. The Matthewses learned of this and contacted her about the matter. Williamson claims...

The Federal Trade Commission (FTC) brings a deceptive trade practice action against Beneficial Finance Company based on Beneficials use of its instant tax refund slogan. The FTC argues that...

Zenith Steel Company operates a prosperous business. The board of directors voted to spend $20 million of the companys surplus funds to purchase a majority of the stock of two other companiesthe...

Casey Martin, a professional golfer with a circulatory disorder that makes walking an 18-hole golf course painfully difficult, was successful in his Title III of the Americans with Disabilities Act...

At the end of a two-year lease, landlord and tenant discussed a new lease. The tenant sent a letter to the landlord stating that it would pay rent of $1,800 per month and that "all other terms and...

The State of Ohio decides that Ohio's landfills are becoming too full at too rapid a pace, so it passes a law banning the import of waste generated out of state. Several landfill operators have...

Identify three primary sources of tax law.

Melvin Lyttle told John Montana and Paul Knight about a Trading Program that purportedly would buy and sell securities in deals that were fully insured, as well as monitored and controlled by the...

THE LEGAL ENVIRONMENT DIMENSION At Brieres stable, LaPlace had access to, and control over, Park Me In First at any time. Could Briere thus deny that a bailment relationship existed? Explain. WHAT IF...

Atul Bhagat was an employee of Nvidia Corporation. Nvidia successfully competed for a multimillion-dollar contract to develop the X-box video game console for Microsoft. Nvidia's CEO sent a...

THE ETHICAL DIMENSION Is it ethical for an insurer to refuse to pay a claim under the terms of a policy that the insurer drafted? Discuss. WHAT IF THE FACTS WERE DIFFERENT? Suppose that Tennessee...

In assessing the validity of a prior court decision, discuss the significance of the following on the taxpayers issue. a. The decision was rendered by the U.S. District Court of Wyoming. Taxpayer...

Dr. Will Pirkey, a U.S. otolaryngologist, signed an employment contract in which he agreed to work for two years at the King Faisal Hospital in Saudi Arabia. Before his departure, Pirkey received his...

What two general requirements must be met for a transaction to result in a capital loss?

Tiffany and Carlos decided to liquidate their jointly owned corporation, Royal Oak Furniture (ROF). After liquidating its remaining inventory and paying off its remaining liabilities, ROF had the...

Clay orally promises Trent to sell him five crops of potatoes to be grown on Blackacre, a farm in Minnesota, and Trent promises to pay a stated price for them on delivery. Is the contract enforceable?

Hearsay is literally what a witness says he or she heard another person say. What makes the admissibility of such evidence potentially unethical?

As an assistant comptroller for Interior Crafts, Inc., in Chicago, Illinois, Todd Leparski was authorized to receive checks from Interiors customers and deposit the checks into Interiors account....

From the 1960s, James Johnson served as Bradley Unions personal caretaker and assistant, and was authorized by Union to handle his banking transactions. Louise Johnson, Jamess wife, wrote checks on...

Artis owns 40%of the Rhode Island Chile Parlor (RICP). During the current year, Rhode Island gives Artis fringe benefits worth $4,000 in addition to his $30,000 salary. RICP's net taxable income...

Sterling is a college professor with an extensive stock portfolio. Last year, he met Wheeler, a stockbroker with the firm of Ransom, LaForge, and Adkins. To get Sterlings business, Wheeler offered to...