Blog

A taxpayer sells an asset with a basis of $25,000 to an unrelated party for $28,000. The taxpayer has a realized gain of $3,000.

A basic principle of the law as defined in 1914 states that:

A taxpayer had the following income and losses in the current year:Salary$55,000Sold AT&T stock at a loss( 5,000)Lottery prize4,500 Gambling winnings8,000 Gambling losses( 5,000)What is the taxpayer’s adjusted gross income?

Michelle purchased her home for $350,000, and subsequently added a garage costing $25,000 and a new porch costing $5,000. Repairs to the home’s plumbing cost $1,000. The adjusted basis in the home is

Will exchanges a building with a basis of $35,000, and subject to a liability of $30,000, for land with a FMV of $50,000 owned by Jane. Jane takes the building subject to the liability. The amount realized by Will is

Norah, who gives music lessons, is a calendar-year taxpayer using the cash-basis accounting. On October 1 of this year, she received $1,200 for a one-year contract beginning on that date to provide 10 lessons. She gave 6 lessons this year. How much should Norah include in income this year?

Vincent makes the following gifts during 2023:Cash gift to wife of $15,000Gift of automobile valued at $35,000 to his adult sonGift of golf clubs valued at $5,000 to a friendCash donation to church of $10,000Although he is married, none of the gifts are considered joint gifts with his wife. What are the total taxable gifts subject to the unified transfer tax? Please show supporting computations to receive full credit.

The following information for 2023 relates to Emma Grace, a single taxpayer, age 18:a.Compute Emma Grace’s taxable income assuming she is self-supporting.b.Compute Emma Grace’s taxable income assuming she is a dependent of her parents.

Mike sold the following shares of stock in 2023:a. Determine the net taxable gain / loss for the the portfolio sales. b.  Determine the tax consequences of these transactions, assuming his taxable income is (1) $200,000 and (2) $600,000? Ignore the Medicare tax on net investment income. Please show supporting computations.

Tyler has rented a house from Camarah since last year. The rent is usually $1,200 per month, but Camarah reduced the monthly rent down to $200 for all twelve months this year in exchange for Tyler putting in an inground pool in the backyard. The improvement has a fair market value of $20,000. How much total rental income must Camarah report this year?