Concepts In Federal Taxation 19th Edition Kevin E. Murphy, Mark Higgins, Tonya K. Flesher - Solutions

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Access the Web site of the Copyright Office. If an applicant for copyright registration for a computer program believes that depositing the computer program’s source code would disclose its trade secrets, what deposit should it make?
Review the UTSA on the Web site of the National Conference of Commissioners on Uniform State Laws.a. Review the Legislative Fact Sheet. Which organization has endorsed the UTSA?b. Review the text of the Final Act relating to injunctive relief. Will an injunction be terminated when a trade secret
Vision has observed that Vacation Vista, a competitor hotel chain, has begun decorating its lounges, common areas, and restaurants in the same color schemes as Vision. The overall appearance and impression created by Vacation Vista in its hotels is highly similar to that of Vision’s. Vacation
An unauthorized picture of actor George Clooney has appeared in the following:a. An article in Newsweek about Hollywood power brokersb. An advertisement for men’s colognec. A review by The Today Show of Mr. Clooney’s latest movieDiscuss whether Mr. Clooney has any remedies for these uses of his
Pop singer Britney Spears would like to stop publication of an unauthorized biography of her. Ms. Spears intends to assert that the book will infringe her right to publicity. Is such a claim likely to succeed? Discuss.
The maker of DURACELL® batteries is advertising that its batteries are “longer lasting” than those of ENERGIZER®. Is such a statement actionable? Discuss.
The maker of GRACO® child safety seats has begun advertising that its seats are the “safest on the market” and are being sold at “great prices.” Are such statements actionable? Discuss.
ABC Inc. has begun marketing a series of stuffed animals that are highly similar to BEANIE BABIES® in their size, color, and overall impression. What sort of action should the maker of BEANIE BABIES® bring? Would it make a difference if there were no federal trademark registration for “Beanie
Discuss what type of trademark dilution is involved for each of the following:a. Kraft sunscreenb. Barbie’s Pleasure Palace (for adult-oriented materials)c. Nike mascara
Access the Web site of the World Trade Organization. Review its Glossary. What does the term “counterfeit” mean?
Vision owns a variety of names, inventions, and marketing materials that it seldom uses. It would like to explore the opportunity of either abandoning these IP assets or using them to produce revenue for the company. Additionally, Vision would like to borrow a significant amount of money from a
Assume that an IP audit reveals that a client has acquired several registered copyrights and trademarks from another company. Although it is not required that one record a transfer of ownership of such assets, why should the appropriate documents be recorded with the USPTO and Copyright Office?
During the course of an IP audit, the legal team determines that a client is using only 10 of its 30 issued patents. What might the client consider doing with respect to the unused patents?
Your law firm conducts annual audits for its IP clients. One of the clients is being purchased by a large company. The acquisition must be effected within 10 days. What advantage does last year’s IP audit afford the client?
Access the Web site for the law firm Fish & Richardson P.C. Locate a 1998 article written by firm lawyers and posted on the Web site relating to IP audits. What is the conclusion of the article?
Access the Web site for the Patent Commons Project. Review the information relating to contributors to the Project.a. What did Nokia pledge to the Commons (specifically, identify the document name)?b. What did Computer Associates International pledge to the Commons? Specify the document name and
Some patent experts think that the Bilski decision, and sentiments such as those expressed by Judge Mayer, may signal an end to all business process patents in the near future. Should business process patents be severely limited or eliminated? Why or why not? At one time, it was difficult for
Why would the parties to the ACTA negotiations be reluctant to disclose the details of the provisions under consideration? In 2008, the United States began negotiating a new international treaty with the European Union, Japan, and Switzerland. By 2009, Australia, Canada, Jordan, Mexico, Morocco,
Could Little Rest prevent confusion between the Buddha Bars in New York City and Paris by posting a disclaimer on Buddha Bar NYC’s Web site? Would such a disclaimer be effective? Explain your answer.George V Restauration S.A. and others owned and operated the Buddha Bar Paris, a restaurant with
Eagle Corporation began marketing software in 2000 under the mark “Eagle.” In 2009, Eagle.com, Inc., a different company selling different products, begins to use “eagle” as part of its URL and registers it as a domain name. Can Eagle Corporation stop this use of “eagle”? If so, what
What are trade secrets, and what laws offer protection for this form of intellectual property?
What steps have been taken to protect intellectual property rights in today’s digital age?
In which of the following situations would a court likely hold Maruta liable for copyright infringement? 1. At the library, Maruta photocopies ten pages from a scholarly journal relating to a topic on which she is writing a term paper.2. Maruta makes leather handbags and sells them in her small
Professor Littrell is teaching a summer seminar in business torts at State University. Several times during the course, he makes copies of relevant sections from business law texts and distributes them to his students. Littrell does not realize that the daughter of one of the textbook authors is a
Briefing.com offers Internet-based analyses of investment opportunities to investors. Richard Green is the company’s president. One of Briefing com’s competitors is Street Account, LLC (limited liability company), whose owners include Gregory Jones and Cynthia Dietzmann. Jones worked for
In 1969, Jack Masquelier, a professor of pharmacology, discovered a chemical antioxidant made from the bark of a French pine tree. The substance supposedly assists in nutritional distribution and blood circulation. Horphag Research, Ltd., began to sell the product under the name Pycnogenol, which
Red win Wilchcombe is a musician and music producer. In 2002, Wilchcombe met Jonathan Smith, known as Lil Jon, a member of Lil Jon & The East Side Boyz (LJESB). Lil Jon and LJESB are under contract to give TeeVee Toons, Inc. (TVT), all rights to LJESB’s recordings and Lil Jon’s songs. At Lil
Custom Copies, Inc., in Gainesville, Florida, is a copy shop, reproducing and distributing, for profit, on request, material published and owned by others. One of the copy shop’s primary activities is the preparation and sale of coursepacks, which contain compilations of readings for college
In the United States, patent protection is granted to the first person to invent a given product or process, even though another person may be the first to file for a patent on the same product or process. What are the advantages of this patenting procedure? Can you think of any disadvantages?
Sync Computers, Inc., makes computer-related products under the brand name “Sync,” which the company registers as a trademark. Without Sync’s permission, E-Product Corp. embeds the Sync mark in E-Product’s Web site, in black type on a blue background. This tag causes the E-Product site to
The U.S. Patent and Trademark Office require that a registered trademark or service mark be put into commercial use within three years after the application has been approved. Why do you think the federal government put this requirement into place?In marketing courses, you have learned or will
1. Would the name Hallowed receive protection as a trademark or as trade dress?2. If Trent and Xavier had obtained a business process patent on Hallowed, would the release of Halo 2 infringe on their patent? Why or why not?3. Based only on the facts described above, could Trent and Xavier sue the
What effect does a property's use have on the cost recovery allowable on the property?
What is the difference between a property's use and its type?
Explain the difference between tangible property and intangible property.
How is personal property different from personal use property?
Explain the role an asset's initial basis plays in determining the income to be recognized upon disposal of the asset.
Explain the difference between a property's initial basis and its adjusted basis.
Larry is interested in acquiring a business owned by Jane. If Jane's business is organized as a corporation, what options are available to Larry in acquiring the business? Explain to Larry the difference in the options.
What tax problems does a taxpayer encounter when purchasing more than one asset for a single price? Explain.
What are the tax implications of a taxpayer's self construction of assets for use in the taxpayer's trade or business?
List some costs that are normally expensed that must be capitalized when a taxpayer self-constructs an asset for use in a trade or business.
Why are gifts of property not income to the person receiving the gift?
A person who receives property as a gift makes no investment to receive the property. Why is a basis assignment to the gift property necessary even though the donee has no investment in the property?
What is the general rule for determining the basis of gift property?
Janine is planning to make a gift of 50 shares of Acran, Inc., stock to her nephew to help with his college tuition. The stock cost Janine $5,000, and its current value is $4,000. Explain to Janine why the gift might not be the best way to achieve her goal.
What is the general rule for determining when the holding period of an asset begins?
What type(s) of asset acquisitions do not follow the general rule for determining when the holding period of the asset begins?
When is the primary valuation date for valuing inherited property? Does the executor of the estate have to do anything to use the primary valuation date?
When is the alternate valuation date for valuing inherited property? When elected, are all assets valued on the alternate date? Explain.
Are commissions paid to acquire securities a deductible expense? If not, are they ever deductible?
For each of the following assets, determine whether it is personal property, real property, intangible property, or personal use property:a. Reagan gave her mother a new set of golf clubs for Christmas.b. Roberta bought a whistle and uniform for use in her job as a referee.c. Rochelle purchased a
For each of the following assets, determine whether it is personal property, real property, intangible property, or personal use property:a. Woodrow spent $5,380 on trees and shrubs for use in his landscaping business.b. Woodrow spent $12,100 on a new tennis court for the backyard of his personal
Determine the adjusted basis of each of the following assets:a. Leineia purchased an automobile 2 years ago for $30,000. She uses it 75% in her business and 25% for personal use. To date, she has deducted $4,209 in allowable depreciation on the business use portion of the automobile.b. Three years
Determine the adjusted basis of each of the following assets:a. Andre´ purchased a parcel of land three years ago for $17,000. In the current year, the adjoining property owner sues him, claiming that part of Andre´'s property belongs to him under the right of adverse possession. Andre´ incurs
Alberta owns 5 acres of land shepurchased several years ago for $6,500.A new housing development is being built on the north side of her property.The owner of the development needs part of Alberta's land to run utility and sewer lines to the new development. The owner offers Alberta $13,000 for
Luana pays $40 per share for 100 shares of Manano Corporation common stock. At the end of the year, the market price of the stock is $60 per share. During the year, she receives a cash dividend of $4 per share. Manano reports that $3 per share is taxable and $1 per share is a nontaxable dividend.
Carl Corporation acquires a business use warehouse for $200,000 on January 2, 2004. From 2004 through 2009, Carl Corporation properly deducts a total of $30,000 in depreciation. Carl incurs a net operating loss and deducts no depreciation in 2010, even though $12,500 could have been claimed. Kelsa
Hannibal owns a farm. He purchases a tractor in 2007 at a cost of $25,000.Because 2007 is a bad year, he does not deduct any depreciation on the tractor in 2007. He sells the tractor in 2011 for $16,000. He takes straight-line depreciation on the tractor of $12,500 for the years 2008 to 2011. The
Determine whether each of the following transactions would result in an increase in basis, a decrease in basis, or no effect on basis:a. Dolly pays $3,000 for a survey to disprove her neighbor's claim that the boundaries dividing their properties are in error.b. Dolly pays a $500 street improvement
During the current year, Horace's personal residence is damaged by a tornado. The residence had an adjusted basis of $80,000 before the tornado. The cost of repairing the damage is $30,000. Horace's insurance company reimburses him $22,000 for the repairs. Horace itemizes his deductions and has an
Amos and Thomas form the Show Corporation during the current year. Amos owns 40% of Show's stock, Thomas owns 20%, and Arthur owns the remaining 40%. Amos paid $50,000 for his interest, and Thomas paid $25,000. Amos and Thomas are responsible for Show's daily operations and serve as co-chief
Return to the facts of problem 30. Assume that Show Corporation is organized as an S corporation. In its second year of operations, Show has an operating loss of $40,000 and pays out $20,000 in dividends. On December 31, Amos gives a 10% interest in Show (i.e., ¼ of his interest) to his son,
Paula purchases a 40% interest in Dancer Enterprises for $52,000 on January 2 of the current year. Dancer is organized as a partnership and has an income of $50,000 in the current year. Dancer also distributes a total of $15,000 to the partners in the current year. What are the tax effects to Paula
Troy owns 600 of the 1,000 outstanding shares of Oiler Corporation. His adjusted basis in the Oiler stock at the beginning of the current year is $88,000. Oiler Corporation is organized as an S corporation and reports the following results for the current year:Operating income before special items
Erin purchases 2 acres of land in 2011 by paying $4,000 in cash at closing and borrowing $40,000 to be repaid at $8,000 per year for the next 5 years with interest on the unpaid balance at 10%. In addition, Erin agrees to let the seller store farm equipment on the land for 2 years (rental value of
Florian Corporation purchases a piece of land for investment purposes on April 1. Florian pays the seller $2,000 cash and agrees to pay the seller $3,000 per year for the next 5 years plus interest at 9% per year on the outstanding balance. As part of the purchase agreement, Florian agrees to pay
Alphonse purchases a store and a warehouse. The asking price includes $150,000 for the store, $50,000 for the warehouse, and $90,000 for the land.Alphonse agrees to this price even though he does not want to buy the warehouse because it does not meet his needs. He sells the warehouse building for
Barbara wanted to go into the long-distance trucking business. She bought a used tractor and trailer for $102,000. However, the trailer wasn't suitable for Barbara's needs, so she sold it for $24,000 and purchased the trailer she needed for $30,000.What is Barbara's basis in the tractor? What is
On October 1, 2011, Mitzo Realty Partnership purchases a lot for future development for $60,000 from the Elm Trust. The trust's adjusted basis in the lot is $20,000. Real estate taxes attributable to the property are $1,000. The city in which the lot is located operates on a calendar year, and
Fala is the sole shareholder of Campbell, Inc. During the current year, Campbell sells Fala land that has a fair market value of $40,000 for $28,000. Campbell had paid $30,000 for the land. What are the tax effects of the sale for Fala and Campbell? What is Fala's basis in the land?
Izzy is an employee of Kosmo's Kustom Kars, Inc. The company rebuilds classic automobiles for resale. Last year, Izzy bought a rebuilt 1956 Thunderbird for $15,000 from the company. A car like Izzy's Thunderbird generally sells for $28,000. On December 20 of the current year, Izzy receives an offer
Nathaniel purchases a house by paying $25,000 in cash and securing a home Communication Skills mortgage for $75,000. He also incurs $3,000 in legal fees, title search, and closing costs. He agrees to pay the property taxes for the entire year ($6,000), even though his share would be $1,000. A
Hester Corporation purchases a building by giving stock with a fair market value of $30,000 (original cost was $21,000) and borrowing $210,000. Hester pays closing costs of $10,000 on the purchase. For property tax purposes, the land is assessed at $10,000 and the building at $40,000. Before buying
Earl purchases all the assets and assumes the liabilities of Buddy€™s Market Shop. Details concerning the adjusted basis and fair market value of Buddy€™s assets and liabilities are as follows:a. If Earl pays $250,000 for Buddy€™s net assets, what is Earl€™s
ABC Company purchases all the assets of Johnâ€™s Saw Shop. Details on basis and fair market values of Johnâ€™s Saw Shopâ€™s assets are as follows:a. What is ABCâ€™s basis in the assets purchased if ABC pays $40,000 for them?b. What is ABCâ€™s basis in the assets purchased
Kieu Corporation constructs a new warehouse. It pays $100,000 for materials and $70,000 to the general contractor. Architectural fees total $18,000. The corporation pays $13,000 in interest on its loan to finance construction. The land costs $15,000, and the real estate taxes paid on the land
Latham Corporation constructs a new factory building. The materials cost $300,000. Other costs include direct labor of $150,000, worker pension costs of $5,000, architectural fees of $15,000, and depreciation on equipment of $25,000. The land was purchased for $30,000. A loan of $500,000 is needed
Julia receives 1,000 shares of Cookery Corporation stock from her grandfather as a wedding present. The shares are selling for $24 per share on the date of the gift. Grandfather paid $8,000 for them 4 years earlier. He pays $3,000 in gift tax on the transfer of the shares to Julia.a. What is
Calculate the basis for gain and basis for loss and the taxable gain or deductible loss for the following gifts which are received and sold in the currentyear:
For his birthday, Moose gives his son, Babe, a valuable basketball card. Moose paid $100 for the card 12 years earlier. On Babe’s birthday, the card is valued in a basketball card guidebook at $90. What is Babe’s basis in the card? Explain.a. Assume that Babe sells the card 2 months after his
Stockton pays $10,000 for 1,000 shares of Megacron, Inc., common stock on the day his niece Chama is born. Stockton’s plan is to give the stock to Chama when she is ready to go to college. Eighteen years later, Chama is ready to leave for Eastern Private University. She needs the money for
Florence’s daughter, Eunice, needs $5,000 to start a business. Florence agrees to give her the money but will have to sell some securities to raise that much cash. Florence has 1,200 shares of Tom Corporation common stock, which is selling for $5 per share. Florence purchased the shares six
Mikel’s daughter, Liudmila, is planning to go to law school in the fall. Mikel has promised her that he will pay her tuition, fees, and book costs. Mikel has 1,000 shares of Konrad Corporation stock that he bought four years ago for $50 per share plus commissions. He would like to use the stock
Alex begins using his automobile for business purposes in his new job. The auto cost $25,000 and has a fair market value of $9,000 on the date of the conversion to business use.a. What is Alex’s initial basis in the automobile? Explain.b. What is Alex’s basis for computing depreciation on the
Refer to problem 53. Alex uses the automobile for 3 years and then sells it. During this period, he properly deducts a total of $3,600 in depreciation. What is Alex’s gain or loss on the automobile if he sells it fora. $4,000?b. $23,000?c. $9,000?
Yohanse’s aunt Millie gives him a storage warehouse valued at $250,000 to use in his delivery business. The warehouse has been vacant since Millie inherited it from her grandfather several years ago. At that time, the warehouse had a value of $300,000 and a basis of $50,000.a. What is Yohanse’s
Refer to problem 55. Yohanse uses the warehouse for 4 years and sells it. During this period, he properly deducts a total of $25,000 in depreciation. What is Yohanse’s gain or loss on the warehouse if he sells it fora. $285,000?b. $215,000?c. $245,000?
Chanetra inherits land from her aunt, Tameka. Tameka’s adjusted basis in the land was $150,000, and the fair market value at the date of her death was $200,000. Six months after Tameka’s death, the land is appraised at $225,000. Plans for a nearby shopping mall are announced, and the fair
Jesse€™s grandfather dies on April 13 of the current year. Jesse inherits the following property:a. What is Jesse€™s basis in the inherited property?b. What is Jesse€™s basis in the property if the executor of the estate elects the alternate valuation date?c. Assume
Taylor dies on February 19 of the current year. Among the assets in his estate are 500 shares of Dane Company preferred stock. Taylor paid $14 per share for the stock on August 13, 2001. Market values per share for Dane preferred stock on various dates in the current year are as follows:February 19
Phong would like to begin planning her estate. She owns marketable securities that cost $10,000 twelve years ago. The market value is $40,000. She wonders whether she should sell her securities and distribute the proceeds to her son before she dies or just give the securities directly to him.
Return to the facts in problem 60. Assume that the securities have a fair market value of $2,000. What positive tax strategy exists in this situation? Explain.
Demetri starts a public accounting practice during the current year. He converts 10% of his home into an office. Demetri purchased the property 4 years ago for $100,000. The portion of the purchase price allocated to the house was $80,000. The house (exclusive of the land) is worth $120,000 when he
Alexis purchases a duplex by paying $18,000 cash and assuming the seller’s $80,000 mortgage. She pays legal fees of $3,000 and spends $9,000 on painting and carpeting the 2 units before renting out 1 unit and moving into the other (i.e., 1 unit is her personal residence). Three years later,
Phoebe opens a bait delivery service during the current year. In starting up the business, she decides to use her personal truck as a delivery vehicle. She had paid $16,000 for the truck, which was worth $10,000 when she turned it into a delivery truck.a. What is her initial basis in the truck?
On January 5, 2011, Henry purchases 500 shares of Wichmann, Inc., common stock at a cost of $24,700. On April 1, 2011, he purchases an additional 300 shares for $19,500. On November 13, 2011, Wichmann, Inc., declares and distributes a 30% stock dividend. On December 23, 2011, Wichmann distributes a
On September 5 of last year, Edwina purchases 100 shares of Atlantis Corporation common stock for $5,000. In December of the current year, she receives a nontaxable stock dividend of 10 shares of preferred stock from Atlantis. At the date of the dividend, the fair market value of the preferred
Clarece has the option of receiving 2 shares of common stock as a stock dividend on the 10 shares of Ramble Company common stock that she owns. She paid $30 per share for her 10 shares. The common stock is now selling for $20 per share. In lieu of receiving the 2 shares, Clarece may elect to
Eric owns 600 shares of Razor, Inc., stock for which he paid $3,500 in 2007. On December 14, 2011, he sells the 600 shares for $4 per share and pays a commission of $200 on the sale. On January 3, 2012, Eric purchases 500 shares of Razor, Inc., for $3 per share and pays a $150 commission on the

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Concepts In Federal Taxation 19th Edition Kevin E. Murphy, Mark Higgins, Tonya K. Flesher - Solutions

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