(SOLVED) In December Dan sells unlisted stock with a cost

of
In December, Dan sells unlisted stock with a cost of $14,000 for $20,000. Dan collects $5,000
down and is scheduled to receive $5,000 per year for three years plus interest at a rate
acceptable to the IRS. a. How much gain must Dan recognize in the year of the sale? […]

Ace Construction Company sells a used crane to Go Construction for $80,000. The crane,
which originally cost $900,000, is fully depreciated. Under Sec. 1245 depreciation recapture
rules, the entire gain is taxable as ordinary income. Ace receives a down payment of $20,000
and is to receive $20,000 per year for […]

Prime Corporation begins operations in late 2015. Prime decides to use the single-pool LIFO
method. Year-end inventories under FIFO are as follows: 2015 ………………………. $110,000 2016
………………………. 134,000 2017 ………………………. 125,000 The price index for 2015 is 130%; for 2
134%; and 2017, 140%. What are 2016 and 2017 inventories?

How much of the following expenses are currently deductible by a cash basis taxpayer? a.
Medical prescriptions costing $20 paid by credit card (medical expenses already exceed the
10% of AGI floor). b. Prepaid interest (not related to points) of $200 on a residential loan. c.
Taxpayer borrows $300 from […]

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Lavanya, a single taxpayer, is a practicing accountant. She obtains permission to change her
tax year from the calendar year to a year ending July 31. Her practice income for the seven
months ending July 31 is $40,000. In addition, Lavanya has $3,000 of interest income and
$6,500 of itemized […]

Each of the following cases involves a taxable year of less than 12 months. In which situations
is annualization required? a. A new corporation formed in September elects a calendar year. b.
A calendar-year individual dies on June 15. c. Jean, who has been using a calendar year,
marries Hank, […]

For each of the following cases, indicate whether the taxpayer has selected an allowable tax
year in an initial year. If the year selected is not acceptable, indicate what an acceptable year
would be. a. A corporation selects a January 15 year-end. b. A corporation selects a March 31
year-end. […]

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