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Taylor Company placed in service on May 19, 2025 machinery and equipment (7-year property) with a basis of $3,860,000. Assume that Taylor has sufficient income to avoid any limitations. Calculate the maximum depreciation expense for 2023.Half-Year Convention Year 1: 5-year 20.00%; 7-year 14.29%. Mid-Quarter Convention Quarter 1 Year 1: 5-year 35.00%; 7-year 25.00%. Mid-Quarter Convention Quarter 2 Year 1: 5-year 25.00%; 7-year 17.85%. Mid-Quarter Convention Quarter 3 Year 1: 5-year 15.00%; 7-year 10.71%. Mid-Quarter Convention Quarter 4 Year 1: 5-year 5.00%; 7-year 3.57%

Lincoln Corporation reported the following items of income and expenses for 2023:  Gross income – $600,000; Dividend income from a 30% owned corporation – $100,000; Operating expenses – $400,000.  What is Lincoln’s taxable income for 2023?

James and Dolley form Madison Corporation.  James transfers land (FMV $20,000; A/B $18,000) in exchange for 50% of the Madison Corporation stock.  Dolley transfers equipment that originally cost $28,000 on which she has taken $5,000 in depreciation deductions.  The equipment has a FMV of $25,000.  Dolley receives 50% of the Madison Corporation stock and a $5,000 short-term note receivable.  Which statement below is correct?

In exchange for stock with a FMV of $2,000 and $500 cash, Dwight transfers property with a tax basis of $5,000 and a FMV of $3,000 to Eisenhower Corporation in a transaction that qualifies under §351.  Eisenhower Corporation assumed a liability of $500 on the property transferred.  What is Dwight’s tax basis in the stock received in the exchange?

On December 31, 2025, after receipt of his share of partnership income, Ulysses sold his interest in Grant Partnership for $30,000 cash and relief of all liabilities. On that date, the adjusted basis of Ulysses’ partnership interest was $40,000, consisting of his capital account of $15,000 and his share of the partnership liabilities of $25,000. What is Ulysses’ gain or loss on the sale of his partnership interest?

Chester has a 50% partnership interest in Arthur Partnership. The basis for his partnership interest is $50,000. The partners share the economic risk of loss from liabilities in the same way they share partnership income and losses. Chester receives a distribution of land that has an FMV of $40,000 and an adjusted basis of $30,000. The land is subject to a $15,000 liability, which Chester assumes. His basis in the partnership interest following the land distribution is

Nixon Corporation has income from operations of $192,000, a dividend from a 5% owned corporation of $88,000, business expenses of $168,000 and a dividend received deduction of $44,000.  Nixon Corporation makes cash contributions of $35,000 to charitable organizations.  What is Nixon Corporation’s charitable contribution deduction for the current year?

Barack and Michelle are both 25% owner/managers for Obama Enterprises.  Barack runs the retail store in Little Rock, AR.  Michelle runs the retail store in Fayetteville, AR.  Obama Enterprises generated a $135,000 profit companywide made up of a $75,000 profit from the Little Rock store, a ($25,000) loss from the Fayetteville store, and a combined $85,000 profit from the remaining stores.  If Obama Enterprises is taxed as a partnership and decides that Barack and Michelle will be allocated 70% of their own store’s profit with the remaining profits allocated pro rata among all the owners, how much income will be allocated to Barack?

Martin purchases a 50% interest in Van Buren Partnership for $30,000 cash on the first day of the partnership’s tax year, . The partnership has $40,000 in liabilities when Martin enters the partnership. Partners share the risk of loss from liabilities in the same way they share partnership income and losses. During 2025, the partnership incurs a $120,000 loss and a $20,000 increase in liabilities. How much of the loss can Martin report on his tax return for 2025?

Franklin owns a 25% interest in Pierce Partnership. On January 1, 2025 Franklin had a basis in his partnership interest of $5,000. For 2025 Pierce Partnership reported the following items: Ordinary business income – $100,000; §1231 gain – $15,000; Charitable contributions – $25,000; Tax-exempt income – 3,000; Pierce Partnership bank loan – $12,000. What is Franklin’s outside basis after adjustment for his share of these items?