Southwestern Federal TaxationHomework Chapter 1 & 3Mary K. Smithe. Net operating losses of a current year can be carried back to profitable years.
f. A taxpayer who sells property on an installment basis can recognize gain on the sale over the period the payments are received.
52. A mother sells a valuable collection of antiques to her daughter for $1000. What judicialconcept might the IRS invoke to question this transaction?
Chapter 3 Questions3. Which of the following items can be inclusions in gross income?a. During the year, shares of stock that the taxpayer had purchased as an investment double in value.This would not be realized as income until the disposition of the stock.b. Amount of off-duty motorcycle officer received for escorting a funeral procession. This would be an inclusion, compensation for services.c. While his mother Shirley was in the hospital, the taxpayer sold Shirley’s jewelry and gave the money to his girlfriend, Serena. This would be an inclusion, gains from sale of property or from illegal activities (he could be considered for theft if his mother didn’t say he could sell the jewelry).d. Child support payments received. This would be an exclusion.e. A damage deposit the taxpayer recovered when he vacated the apartment he had rented. This would be an inclusion, rents.