Smith company sells a machine during the year for

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Smith Company sells a machine during the year for $100,000. Smith acquired the machine for $140,000. At the time of sale, the machine's adjusted basis was $47,200. Smith Company's recognized gain on the sale is: a) $52,800
Code Sec. 1231 gain,b) $52,800 Code Sec. 1245 gain,c) $10,560 Code Sec. 291 gain and $42,240 Code Sec. 1231 gain,d) $52,800 long-term capital gain,or e)
CorporationsShareholdersAJVIdentical Ownership James15%20%15%15%Jennifer15%20%20%15%Kimberly15%25%15%15%Susan15%10%20%10%Tom Corporation40%25%30%N/A100%100%100%55%A, B and V Corporations each have only one class of stock outstanding. Are any of the corporations part of a brother-sister controlled group for Code Sec. 1561 purposes? The ownership of the stock is as follows:
The journal entries follow:20132014
Tatco reports a $200,000 warranty expense and a related estimated liability for warranties for book-income purposes in 2013. It does not recognize an expensive for tax purposes based on the estimate. In 2014, Tatco paid the $200,000 expense (settled customer claims) for tax purposes. Its income before warranty expense was $900,000 in 2013 and $1,200,000 in 2014. Assume that corporate tax rates are a constant 35%. What is its current and deferred tax position in 2013 and 2014?

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