On January 2, 2015, Martin Corporation acquires two properties from a shareholder in a transaction that qualifies under § 351. The shareholders basis, the fair market value, and the built-in...

Maria Ochoa receives two new credit cards on May 1. She had solicited one of them from Midtown Department Store, and the other arrived unsolicited from High-Flying Airlines. During the month of May,...

Ross, Marcos, and Albert are partners. Ross and Marcos each contributed $60,000 to the partnership; Albert contributed $30,000. At the end of the fiscal year, distributable profits total $150,000....

David Brown met with Stan Steele, a loan officer with the Bank of Idaho (now First Interstate Bank), to discuss borrowing money from the bank to start a new business. After learning that he did not...

John and Ellen Brite (SSN 000-00-1111 and 000-00-2222, respectively) are married and file a joint return. They have no dependents. John owns an unincorporated specialty electrical lighting retail...

Almega Corporation, organized under the laws of State S, has outstanding twenty thousand shares of $100 par value nonvoting preferred stock calling for noncumulative dividends of $5 per year; ten...

Duke Distribution, Inc. recently had a public offering of its shares. The companys attorneys, its CPAs, and the underwriters attorneys worked diligently to meet a tight deadline that management had...

John and Wilbur form White Corporation on May 3 of the current year. What is the entitys default tax classification? Are any alternative classification(s) available? If so, (1)how do John and Wilbur...

Salmon, Inc., a private foundation, has existed for 8 years. During this period, Salmon has been unable to satisfy the requirements for classification as a private operating foundation. At the end of...

1. Is the dome real property or personal property? Explain. 2. Is Denais gift of land to Finney a testamentary gift, a gift causa mortis, or a gift inter vivos? 3. What type of bailment relationship...

RadioCo, a domestic corporation, owns 100% of TVCo, a manufacturing facility in Ireland. TVCo has no operations or activities in the United States. The U.S. tax rate is 35%, and the Irish tax rate is...

The Federal Aviation Act of 1958 provides that the United States of America is declared to possess and exercise complete and exclusive national sovereignty in the airspace of the United States. The...

Bradley goes into bankruptcy under Chapter 7 owing $5,000 as wages to his four employees. There is enough in his estate to pay all costs of administration and enough to pay his employees, but nothing...

Now suppose that Sun Farms sells its operations to Happy Valley Farms. As a part of the sale, all three parties agree that Happy Valley will provide the basil as stated under the original contract....

Jones, wishing to retire from a business enterprise that he had been conducting for a number of years, sold all of the assets of the business to Jackson Corp. Included in the assets were a number of...

Betsy has a two-year contract as a producer at Jackson Movie Studios. She produces a remake of the movie Footloose. Unfortunately, it bombs, and Jackson is so furious that he fires her on the weekend...

In each of the following cases, determine the corporations that comprise an affiliated group. All corporations are includible corporations and have one class of stock. a. B Corporation owns 100% of C...

Mr. Top received $25,000 in disability payments while he was recuperating from heart surgery. Mr. Top, age 65, is an employee with a large corporation providing general business consulting services....

Ken recruits applicants for several prominent companies. Often when the companies call for Kens services, they strongly hint that they do not wish to hire Southeast Asians, so Ken never places them...

Harold H. Heidingsfelder signed a credit agreement as vice president of J. O. H. Construction Co. for a line of credit with Pelican Plumbing Co. The credit agreement contained the following language:...

(Multiple choice) 1. A vulnerability chart: a. Forces investigators to explicitly consider all aspects of a fraud. b. Shows the history of fraud in a company. c. Identifies weaknesses in every aspect...

Walter and Nancy provide 60% of the support of their daughter (age 18) and son-in-law (age 22). The son-in-law (John) is a full-time student at a local university, while the daughter (Irene) holds...

Facts: Your client is the plaintiff in a workers' compensation case. She was injured in 1993 in state A. In 1995, her employer destroyed all the business records relating to the client. The...

As a manager employed by Want-It-Now Rapid Delivery Service, you are responsible for pricing the services involving same-day deliveries. Among your primary concerns is the competitive aspects of your...

Now assume that Chelene knew that the basement walls were cracked and bowed and that she had hired someone to install paneling prior to offering to sell the house. Did she have a duty to disclose...

In 2014, Dudley contributed land to the Prosperity LLC. His basis in the land was $100,000. The fair market value at the contribution date was $115,000. In 2015, the LLC distributes other property...

On June 1 of Year 1, Water Corporation places into service a machine costing $10,000. The machine is seven-year property under the MACRS rules and has a 12-year class life. Water does not elect Sec....

Classify each of the following examples as a cost of searching, bargaining, or enforcing an agreement to purchase a 1957 Chevrolet: a. Haggling over the price. b. Collecting the monthly payments for...

Assuming a 35 percent marginal tax rate, compute the after-tax cost of the following business expenses: a. $5,600 premium on business property and casualty insurance. b. $1,200 fine paid to Wisconsin...

Richardson hired J. C. Flood Company, a plumbing contractor, to correct a stoppage in the sewer line of her house. The plumbing companys snake device, used to clear the line leading to the main...

Compute current E & P for Sparrow Corporation (a calendar year, accrual basis taxpayer). Sparrow reported the following transactions during 2014, its second year of operation. Taxable income...

In 1971, Harry Gordon turned over $40,000 to his son, Murray Gordon. Murray opened two $20,000 custodial bank accounts under the Uniform Gifts to Minors Act for his minor children, Eden and...

Manuel and Fernando own and operate an electronics store, Electronica, as an S corporation. Manuel owns 70%, and Fernando owns 30%. For the current year, the store reports the following: Sales...

Yellow Corporation, a calendar year taxpayer, made estimated tax payments of $40,000 for 2015 ($10,000 per quarter). Yellow filed its Federal income tax return for 2015 reflecting a tax liability of...

Rivera underpaid her income tax by $45,000. The IRS can prove that $40,000 of the underpayment was due to fraud. a. Determine Rivera's civil fraud penalty. b. Rivera pays the penalty five years after...

What rights does Bonsetti have (in most states) as a minority shareholder dissenting to the merger of GVG and Hula Boards? In November 2002, Mario Bonsetti and Rico Sanchez incorporated Gnarly Vulcan...

Chang Corporation is a calendar year taxpayer. At the beginning of the current year, Chang holds accumulated E & P of $33,000. The corporation incurs a deficit in current E & P of $46,000 that...

Greg Allen is an employee, shareholder, and director of Greg Allen Construction Co., and its president. In 1996, Daniel and Sondra Estelle hired Allens firm to renovate a home they owned in Ladoga,...

Daniel Fox owned Fox & Lamberth Enterprises, Inc., a kitchen and bath remodeling business, in Dayton, Ohio. Fox leased a building from Carl and Bellulah Hussong. Craftsmen Home Improvement, Inc.,...

Atlas Capital, LLCs sole member and manager was Weston Wade Sleater. Mr. Sleater signed two promissory notes totaling $4,000,000 as the maker of the notes. The signature blocks of the notes read,...

Carmen opens a retail store. Her sales during the first year are $600,000, of which $30,000 has not been collected at year-end. Her purchases are $400,000. She still owes $20,000 to her suppliers,...

Gary Mendel drew up a will in which he left his favorite car, a 1966 red Ferrari, to his daughter, Roberta. A year prior to his death, Mendel sold the 1966 Ferrari and purchased a 1969 Ferrari....

Jason Lasseigne, a Little League baseball player, was seriously injured at a practice session when he was struck on the head by a poorly thrown baseball from a team member, Todd Landry. The league...

Red Oak, Inc., manufactures and sells children toys. It also sells toys purchased from other manufacturers. During the current year, Red Oak had a profit of $130,000 (all of which is QPAI) from the...

In 2015, Ryce contributes non-depreciable property with an adjusted basis of $60,000 and a fair market value of $95,000 to the Montgomery Partnership in exchange for a one-half interest in profits...

Compute the taxable Social Security benefits in each of the following situations: a. Erwin and Eleanor are married and file a joint tax return. They have adjusted gross income of $46,000, no...

Mackey orders from Pride one thousand cases of Greenie brand peas from lot A at list price to be shipped F.O.B. Prides city via Fast Freight Lines. Pride receives the order and immediately sends...

Assume that the court does find that the contract falls within the Statute of Frauds and that the state in which the court sits recognizes every exception to the Statute of Frauds discussed in the...

Lafer Enterprises sold Christmas decorations to B. P. Development & Management Corp., the owners and operators of the Osceola Square Mall. The package of decorations was delivered to Osceola Square...

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...

Jurisdiction X levies a flat 14 percent tax on individual income in excess of $35,000 per year. Individuals who earn $35,000 or less pay no income tax. a. Mr. Hill earned $98,750 income this year....

Fredstone Consolidated, Inc. and Gradison Enterprises, Inc. are both real estate developers. Each entity owns a 50% general partner interest in Realty Partners, GP, a general partnership. Fredstone...

Rita forgot to pay her Federal income tax on time. When she actually filed, she reported a balance due. Compute Rita's failure to file penalty in each of the following cases. a. Two months late,...

Jane suffers from a degenerative spinal disorder. Her physician said that swimming could help prevent the onset of permanent paralysis and recommended the installation of a swimming pool at her...

As a fraud expert asked to investigate possible fraud at a local nonprofit organization, you suspect that one of the workers, Stacey, has been embezzling money. After securing enough evidence to be...

Ed Neilson is the purchasing agent for Style, a nationwide high-fashion womens online store. He joined the company after graduating from college five years ago. Over the years, Ed developed a close...

Jesse Edwards, an employee of Carbon Processing and Reclamation, LLC (CPR), put unmarked boxes of company records in his car. Edwardss wife, Channon, who suspected him of hiding financial information...

Kate, Chad, and Stan are partners in the KCS Partnership, which operates a manufacturing business. The partners formed the partnership ten years ago with Kate and Chad each as general partners having...

Thomas and Teresa Cline built a house on a 76-acre parcel of real estate next to Roy Bergs home and property in Augusta County, Virginia. The homes were about 1,800 feet apart but in view of each...

Benny purchased $400,000 of Peach Corporation face value bonds for $320,000 on November 13, 2013. The bonds had been issued with $80,000 of original issue discount because Peach was in financial...

Nationwide Discount Furniture hired Rampart Security to install an alarm in its warehouse. A fire would set off an alarm in Ramparts office, and the security company was then supposed to notify...

Thornton fraudulently represented to Daye that he would obtain for her a new car to be used in Dayes business for $17,800 from Pennek Motor Company. Daye thereupon executed her personal check for...

Suppose that Wabash completes the house one month later than promised. Inclement weather, which was no ones fault, caused the tardiness. Explain how the court might compute efficient damages.

A taxpayer lives in Michigan. In a controversy with the IRS, the taxpayer loses at the trial court level. Describe the appeal procedure for each of the following trial courts. a. Small Cases Division...

Use Exhibit 16.1 to compute Balboa Corporations State F taxable income for the year. Addition modifications $29,000 Allocated income (total) . $25,000 Allocated income (State F) . $3,000 Allocated...

The LaPoint Corporation placed in service $350,000 of used equipment (7-year recovery property) on June 3, 2014 and elected to expense $250,000 as Sec. 179 depreciation expense. LaPont sold the...

Decide each of the following problems. (a) A chimney sweep found a jewel and took it to a goldsmith, whose apprentice removed the stone and refused to return it. The chimney sweep sues the goldsmith....

1. What is the basis for the determination that an employer should or should not be required to test applicants on an individual basis? 2. Should an employer have available as a defense that the cost...

Harper is considering three alternative investments of $10,000. Assume that the taxpayer is in the 28% marginal tax bracket for ordinary income and 15% for qualifying capital gains in all tax years....

Suppose that Consolidated Stores is undergoing a unionization campaign. Prior to the union election, management states that the union is unnecessary to protect workers. Management also provides...

A lessor leased a trailer park to a tenant. At the time, sewage was disposed of by a septic tank system that was not connected with the public sewage system. The tenant knew this, and the lease...

A calendar year S corporation reports an ordinary loss of $80,000 and a capital loss of $20,000. Mei Freiberg owns 30% of the corporate stock and holds a $24,000 basis in the stock. Determine the...

Ms. C paid $500 of union dues and $619 for small tools used on the job. In each of the following cases, compute her after-tax cost of these employment-related expenses. a. Ms. Cs employer paid her a...

Assume the following tentative minimum tax and regular tax amounts have been calculated for Krolick Corporation: align="center"> Complete the following table by calculating any minimum tax credit...

Should ICANNs actions be judged under the rule of reason or be deemed a per se violation of Section 1 of the Sherman Act? The Internet Corporation for Assigned Names and Numbers (ICANN) is a...

Paula orally agrees to work with Next Corporation in New York City for two years. Paula moves her family and begins work. Three months later, Paula is fired for no stated cause. She sues for...

Employer had only one promotion to give, but he was torn between giving it to the single female and the male who had a family and, the employer thought, most needed and could best use the money. He...

Calculate the total Social Security and Medicare tax burden on a sole proprietorship earning 2015 profit of $300,000, assuming a single sole proprietor.

Mr. Kim is a U.S. citizen who has been stationed at his employers Tokyo office for the last six years. a. Compute Mr. Kims AGI if his only income was his $65,000 salary. b. Compute Mr. Kims AGI if...

On November 1, 2006, Janet Morton and Kim Wong formed Pet Kingdom, Inc., to sell pets and pet supplies. Pertinent information regarding Pet Kingdom is summarized as follows: Pet Kingdom's business...

In which of the following situations would specific performance be an appropriate remedy? Discuss fully. (a) Thompson contracts to sell her house and lot to Cousteau. Then, on finding another buyer...

Multiply Choice 1. Generally, a corporations articles of incorporation must include all of the following except the: (a) Name of the corporations registered agent (b) Name of each incorporator (c)...

In 2002, Sami Elestwani worked for Nicolet Biomedical and was a key account manager. He was informed that he would be reassigned due to concerns about his ability to adequately perform his job...

In 2006, Myspace, an Internet Web site for young adult social networking, was sued by the Universal Music Group, Inc., for copyright infringement. Basically, Myspace was allowing users to upload...

Can check cashing companies be holders in due course? What arguments can you make for and against their holder-in-due-course status? [Dal-Tile Corp. v Cash N Go, 487 SE2d 529 (Ga App)]

Does it matter that ICANNs leadership is chosen by those with a commercial interest in the Internet? The Internet Corporation for Assigned Names and Numbers (ICANN) is a nonprofit entity organizing...

You have recently graduated from college with an MBA. Upon graduation, you start working for Roosevelt Power Plant. The boss, Mr. Jones, invites you into his office. Mr. Jones describes to you a...

Suzy contributed business-related assets valued at $360,000 (basis of $200,000) in exchange for her 40% interest in the Suz-Anna Partnership. Anna contributed land and a building valued at $640,000...

Tory, Becky, Hal, and Jere form TBHJ Partnership as equal owners. TBJH Partnership rents heavy tools and equipment. Becky and Hal are married to each other while Tory and Jere are brothers but are...

Frances Morelli agreed to sell Judith Bucklin a house in Rhode Island for $ 177,000. The sale was supposed to be closed by September 1, when the parties were to exchange the deed for the price. The...

Weather, Inc., a domestic corporation, operates in both Fredonia and the United States. This year, the business generated taxable income of $600,000 from foreign sources and $900,000 from U.S....

Assume in Problem 47 that Barrys partnership interest is not sold to another partner. Instead, the partnership makes a liquidating distribution of $90,000 cash to Barry, and the remaining partners...

Rick has a $50,000 basis in the RKS General Partnership on January 1 of the current year, and he owns no other investments. He has a 20% capital interest, a 30% profits interest, and a 40% loss...

In January, Dr. Vidricksen contributed $250,000 to become a limited partner in a Chevrolet car agency business with Thom, the general partner. Articles of limited partnership were drawn up, but no...

Find the court decision located at 138 T. C. 40. a. Which court heard the case? b. Who was the judge(s)? c. In what year was the case decided? d. What was the issue(s) involved?

To: [Your name] From: Supervising Attorney Re: Commonwealth v.Jones; assault by means of a dangerous weaponlightning This is a bizarre case to say the least. We have been appointed by the court to...

Travis and Alix Weber are equal partners in the Tralix partnership, which does not have a 754 election in place. Alix sells one-half of her interest (25%) to Michael Tomei for $30,000 cash. Just...

Colgate-Palmolive Co. ran a television commercial to show that its shaving cream, Rapid Shave, could soften even the toughness of sandpaper. The commercial showed what was described as the sandpaper...

1. What were Price Waterhouses fatal flaws? 2. Does Hopkinss treatment here make good business sense? Explain. 3. How would you avoid the problems in this case? In a jointly prepared statement...

An electronics company that produced circuit boards for personal computers was formed in a small southern town. The three founders had previously worked together for another electronics company and...