Questions and Answers of Marketing Strategy Planning

Sam and Taylor, residents of New Jersey, entered in to a domestic partnership in New Jersey in October 2004. However, they never obtained a marriage license. Sam died in March 2018, survived by
In May 2008, Jasper Mason died, survived by his spouse Amber Mason and four adult children. His gross estate was valued at $3 million, and he had Sec. 2053 deductions of $120,000. His will left the
Arthur Zolnick died at age 84 on June 7, 2017. In March 2008, he transferred $4 million of stock to a charitable remainder annuity trust (CRAT) from which he named himself to receive $200,000 per
Your client is Jon Jake, the executor of the Estate of Beth Adams, a widow. Mrs. Adams died 11 years after the death of her husband, Sam. Mr. Jake seeks assistance in the preparation of the estate
Epsilon Corporation, which does not qualify as a small business corporation, incurred a $10 mill ion NOL in the current year. It expects to earn relatively low amounts of net income for the next
Annie James died early in 2018. All her property passed subject to her will, which provides that her surviving husband, Dave James, is to receive all the property outright. Her will further states
What was the Sec. 7520 rate for May, June, and July 2017?
On August 3, 2015 Ginger Grayson, a widow, transferred $55,000 to each of two Sec. 529 plans (qualified tuition programs), one for grandson Greg Grayson and one for granddaughter Gayle Grayson. Her
Janet Mason timely filed a 2016 gift tax return to report the gift on June 3, 2016, of closely held stock in Mason Meat Co., Inc. The tax return, which your firm prepared, reflected a value of $1,500
Your manager advises you that clients Mike and Winona Marsh, residents of Bath, Maine, acquired beachfront property in Maine in 2002 and titled the property in their names as joint tenants with right
Morris Jory, a long-time tax client of the firm that employs you, has made substantial gifts during his lifetime. Mr. Jory transferred Jory Corporation stock to 14 donees in December 2017. Each donee
George and Martha, spouses, made a number of gifts during 2018. Their accountant is trying to help them decide whether to elect gift splitting. If they elect gift splitting, each spouse will have $8
In 2018, Ginger Graham, age 46 and wife of Greg Graham, engaged in the transactions described below. Determine Ginger's gift tax liability for 2018 if she and Greg elect gift splitting and Greg gave
In June 2017, Karen transferred property with a $75,000 FMV and a $20,000 adjusted basis to Hal, her husband. Hal dies in March 2018; the property has appreciated to $85,000 in value by then. His
In 2018, Henry and his wife, Wendy, made the gifts shown below. All gifts are of present interests. What is Wendy's gift tax payable for 2018 if the couple elects gift splitting and Wendy's previous
In 2018, Homer and his wife, Wilma (residents of a noncommunity property state) make the gifts listed below. Homer's previous taxable gifts consist of $100,000 made in 1975 and $1.4 million made in
In earlier years, neither Hugo nor Wanda, his wife, made any taxable gifts. In 2017, Hugo gave $14,000 cash to each of his nieces, nephews, and grandchildren, 30 persons in total. In 2018, Wanda
During 2018, Will gives $40,000 cash to Will, Jr. and a remainder interest in a few acres of land to his friend Suzy. The remainder interest is valued at $32,000. Will and his wife, Helen, elect gift
In March 1976, Sue made a taxable gift of $200,000. In arriving at the amount of her taxable gift, Sue elected to deduct the $30,000 specific exemption then available. In 2018, Sue makes her next
Refer to the facts of Problem C: 12-36 and assume the current year is 2018. Emily's prior gifts are as follows:Year . . . . . . . . . . . . . . . . . . . . Amount of Taxable Gifts1974 . . . . . . . .
In the current year, Emily, a widow, engages in the following transactions. Determine the amount of the completed gift, if any, arising from each of the following occurrences.a. Emily names Lauren
Amir made taxable gifts as follows: $800,000 in 1975,$1.2 million in 1999, and $600,000 in 2018. What is Amir's gift tax liability for 2018?
In 2018, Sondra makes taxable gifts aggregating $300,000. Her only other taxable gifts amount to $200,000, all of which she made in 1997.a. What is Sondra's 2018 gift tax liability?b. What is her
Kwambe is thinking of making a substantial gift of stock to his fiancee, Maya. The wedding is scheduled for October 1 of the current year. Assume Kwambe already has exhausted his unified credit. He
In 2008, Frank made an installment sale of real property to Stu, his son, for $1 million with payments due over a 10-year period. Frank did not file a gift tax return. For 2016, Frank reported
Assume the same facts as in Problem C:12-21 and that Marcy has decided to give Phil property valued at $11 mill ion. Phil probably will leave the gifted property to their children under his
Phil and Marcy have been married for a number of years. Marcy is very wealthy, but Phil is not. In fact, Phil, who has only $200,000 of property, is very ill, and his doctor believes that he probably
Both Damien and Latoya make taxable gifts of $250,000 in the current year. Will their current year gift tax necessarily be identical? Explain.
What is the purpose of the gift tax annual exclusion?
Alice, a married taxpayer, will form Morning Corporation in the current year. Alice plans to acquire all of Morning's common stock for a $1 mill ion contribution to the corporation. Morning will
Cara, Bob, and Steve want to begin a business on January 1, 2019. The individuals are considering three business forms-C corporation, partnership, and S corporation.• Cara has investment land with
Tina, a single taxpayer, owns 100% of Rocket Corporation, an S corporation. She has an $80,000 stock basis for her investment on January 1 of the current year (Year 1). During the first 11 months of
Tango Corporation, a calendar year taxpayer, has been an S corporation for several years. Tango's business activities have become very profitable in recent years. On June 16, 2018, its sole
Orlando Corporation, a calendar year taxpayer, has been an S corporation for several years. On July 9, 2018, Orlando authorizes a second class of nonvoting preferred stock that pays a 10% annual
Voyles Corporation, a calendar year taxpayer formed five years ago, desires to make an Selection beginning in 2019. Sue and Andrea each own one-half of the Voyles stock.a. How does Voyles make the
Carl Carson, a single taxpayer, owns 100% of Delta Corporation. During 2018, Delta reports $150,000 of taxable income. Carl reports no income other than that earned from Delta, and Carl claims the
Julio, age 50, is a U.S. citizen who has a 22% marginal tax rate. He has operated the A&B Automotive Parts Company for a number of years as a C corporation. Last year, A&B reported $200,000
Refer to the facts in Comprehensive Problem C:6-54. Now assume the entity is a partnership named Lifecycle Partnership. Additional facts are as follows:• Except for precontribution gains and
Assume the same four independent distributions as in Problem C:10-23. Fill in the blanks in that problem assuming the only change in the facts is that the distributions are now liquidating
The Net Partnership has four partners, with each having a 25% interest in the partnership. The partners share all losses equally, but in accordance with a special allocation, the partnership
The JKL Partnership has three partners with the following interests: Jason 55%, Kathy 25%, and Louis 20%. Will the partnership terminate if jason sells his entire interest to Maurice?
Caitlin and Wally formed the C & W Partnership on September 20,2018. Caitlin contributed cash of $195,000, and Wally contributed office furniture with a FMV of $66,000. He bought the furniture
Sarah and Rex formed SR Entity on December 28 of last year. The entity operates on a calendar tax year. Each individual contributed $800,000 cash in exchange for a 50% ownership interest in the
Refer to Example C:9-27 in the text. Provide computations showing that the partners' total tax liability under the special allocation is less than their total liability under an equal allocation of
Charlene is an equal partner in the CD Partnership. The partnership does not qualify as a small business under the $25 million gross receipts text. The partnership incurred the following items for
Using the facts from Problem C:8-67 below, calculate the tax liabilities of Flying Gator and T Corporations for 2017. How much larger (or smaller) would be the total of the two separate return tax
P Corporation acquires all of S Corporation's stock at the beginning of the current year in a transaction that qualifies as a Sec. 382 ownership change. P and S elect to file a consolidated tax
P and S Corporations comprise an affiliated group that files separate tax returns. P and Shad no intercompany inventory sales before the current year (Year 1). P and S use the first-in, first-out
P Corporation owns 100% of S Corporation's stock, and S owns 100% of T Corporation's stock. The three corporations have filed consolidated tax returns for several years. On January 1 of the current
Corporation owns all the stock of S1 and S2 Corporations. The corporations have filed consolidated tax returns since their creation in Year 1. At the close of business on July 10 of Year 3, P sells
P and S Corporations form in Year 1, with S as P's wholly-owned subsidiary. The corporations immediately elect to file consolidated tax returns. The group reports the following results:In what
Peoria and Salem Corporations have filed consolidated tax returns for several years. For the current year, consolidated taxable income is $300,000. The consolidated general business credit (computed
P Corporation uses the calendar year as its tax year and the accrual method as its overall accounting method. S Corporation uses a fiscal year ending June 30 as its tax year and the cash method as
Sid Kess, a long-time tax client of yours, has decided to acquire the snow blower manufacturing firm owned by Richard Smith, one of his closest friends. Richard has a $200,000 adjusted basis in his
At the beginning of the current year, Allegro Corporation acquires all of Tempo Corporation's stock in a Type B reorganization. At the time of the acquisition, Tempo's stock has a $900,000 FMV, and
Albert Corporation is a profitable publicly traded corporation. None of its shareholders owns more than 1% of its outstanding shares. On December 31, 2017, Albert exchanged $8 million of its stock
Murray Corporation's stock is owned by about 1,000 shareholders, none of whom own more than 1% of the outstanding shares. Pursuant to a tender offer, Said purchased all the Murray stock for $7.5
At the close of business on May 31, 2018, Alaska Corporation exchanges $2 million of its voting common stock for all the noncash assets of Tennessee Corporation. Tennessee uses its cash to pay off
Parent Corporation has owned all 100 shares of Subsidiary Corporation common stock since 2011. Parent has been in the business of manufacturing and selling light fixtures, and Subsidiary has been in
Silvia exchanges all her Theta Corporation stock (acquired August 1, 2014) for $300,000 of Alpha Corporation voting common stock pursuant to Theta's merger into Alpha. Immediately after the
Alpha Corporation purchases 20% of Theta Corporation stock from Milt on August 10 of the current year. Alpha purchases an additional 30% of the stock from Nick on November 15 of the current year.
The following facts pertain to Lifecycle Corporation: • Able owns a parcel of land (Land A) having a $30,000 FMV and $16,000 adjusted basis. Baker owns an adjacent parcel of land (Land B)
Howard Corporation conducts a manufacturing business and has a compelling need to accumulate earnings. Its January 1, E&P balance is $600,000. It reports the following operating results for the
Century Cleaning, Inc. provides cleaning services in Atlanta, Georgia. It is not a member of a controlled or an affiliated group. Century reports the following results for the current year:Taxable
In the current year, Kennedy Corporation is deemed to be a PHC and reports the following results: Taxable income . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rick owns investments that generate $20,000 of ordinary income per year (4% annual before-tax rate of return). In each part, determine how much higher or lower Rick's after-tax income would be if he
Angela forms a corporation during the current year to conduct her new business. The corporation is a C corporation, and Angela is its only shareholder. Is the corporation potentially subject to the
Your friend Carlos often asks you about tax avoidance strategies. He heard that he can reduce his taxes by putting his investments in a corporation and asks you whether this is true. Explain to
John died on March 3, 2018. His gross estate of $16.5 million includes First Corporation stock (400 of the 1,000 outstanding shares) worth $10 million or $25,000 per share ($10,000,000/400). This FMV
Forward Corporation is owned by a group of 15 shareholders. During the current year, Forward pays $550,000 in salary and bonuses to Alvin, its president and controlling shareholder. The corporation's
For many years preceding 2018, Minimis Corporation, a calendar year corporation, had incurred the alternative minimum tax (AMT) and as a result has a $2 million minimum tax carryover into 2018.
Mike Barton owns Barton Products, Inc. The corporation has 30 employees. Barton Corporation expects $800,000 of net income before taxes in 2018. Mike is married and files a joint return with his
In the current year, Alpha Corporation generated $500,000 of ordinary operating income and incurred a $20,000 capital loss on the sale of marketable securities from its investment portfolio. Alpha
Omega Corporation reports the following results for the current year:a. Prepare a reconciliation of Omega's taxable income before special deductions with its book income.b. Prepare a tax provision
Wright Corporation's taxable income for calendar years 2015, 2016, and 2017 was $120,000, $150,000, and $100,000, respectively. Its total tax liability for 2017 was $22,250 (under the tax rates in
Zeta Corporation's taxable income for 2017 was $1.1 million, on which Zeta paid federal income taxes of $374,000 (at its then 34% tax rate). Zeta estimates calendar year 2018's taxable income to be
Refer to the facts in Problem C:3-53. Elizabeth has read an article explaining the advantages of paying nontaxable fringe benefits (premiums on group term life insurance, accident and health
Elizabeth owns 100% of Omega Corporation's stock and also runs the company as its CEO. Omega is a C corporation that expects to earn $400,000 before deducting any salary paid to Elizabeth. Elizabeth
What is Beta Corporation's income tax liability assuming its taxable income is (a) $50,000, (b) $500,000, and (c) $50 million. How would your answers change if Beta were a
Delta Corporation incurs a $100,000 NOL in 2018. In 2019, the corporation reports the following items: Gross profit from operations . . . . . . . . $200,000Operating expenses other than interest
In 2018, Ace Corporation reports gross income of $200,000 (including $150,000 of profit from its operations and $50,000 in dividends from less-than-20%-owned domestic corporations) and $230,000 of
Yellow Corporation donates the following property to the State University:• ABC Corporation stock purchased two years ago for $18,000. The stock, which trades on a regional stock exchange, has a
Crane Corporation incurs a $75,000 NOL in the current year. In which years can Crane use this NOL? What limitations might apply?
What limitations apply to a corporation's deduction for business interest?
Six years ago, Donna purchased land as an investment. The land cost $150,000 and is now worth $480,000. Donna plans to transfer the land to Development Corporation, which will subdivide it and sell
Your client, a physician, recently purchased a yacht on which he flies a pennant with a medical emblem on it. He recently informed you that he purchased the yacht and flies the pennant to advertise
Trace Stephen Bolaris, 776 F.2d 1428, in the citator.a. According to the citator, how many times has the Ninth Circuit's decision been cited?b. Did the decision address more than one issue?
Trace Biltmore Homes, Inc., a 1960 Tax Court memo decision, in the citator.a. According to the citator, how many times has the Tax Court decision been cited by other courts?b. How many issues did the
The objective is to locate a general overview of available home office deductions. On the main research tab, select the United States Tax Reporter-Explanations database. How many results does the
Under a divorce agreement executed in the current year, an ex-wife receives from her former husband cash of $25,000 per year for eight years. The agreement does not explicitly state that the payments
Why did Congress enact the 20% qualified business income deduction?
Write the Lagrange-function of problem (5.41).(5.41) El «]ICm) = W max U[C] subject to |C).CM) m=1
Show that if E[Δxt] = 0, we must have μt = −λtθ.
Show that E[xτ] = 0 still holds.
Prove that the prices of ATM caps and floors coincide.
Show that z*1 · z*2 = (z1 · z2)*.
What is the expectation value of eX?
Verify that (7.22) and (7.23) reproduce the linear model (7.21) for every t = 1, . . . , T.(7.22)(7.23)(7.21) ly) = X\B) + le) У1 X1 ()- ly) = X: B) = |e) = 1 XT ET
Verify that covariances are linear in each argument.
Confirm the total number of free parameters.

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