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Tom Hughes died in 2009 with a gross estate of $3.9 million




Problem 8;Tom Hughes died in 2009 with a gross estate of $3.9 million and debt of $30,000. He made post-1976 taxable gifts of $100,000, valued at $80,000 when he died. His estate paid state death taxes of $110,200. What is his estate tax base?;Problem 7;Monte and Allie each own 50% of Raider Corporation, an S corporation. Both individuals actively participate in Raider?s business. On January 1, Monte and Allie have adjusted bases for their Raider stock of $80,000 and $90,000 respectively. During the current year, Raider reports the following results;Ordinary loss;$175,000;Tax-exempt interest income;20,000;Long-term capital loss;32,000;Raider?s balance sheet at year-end shows the following liabilities: accounts payable, $90,000, mortgage payable, $30,000, and note payable to Allie, $10,000.;What income and deductions will Monte and Allie report from Raider?s current year activities?;What is Monte?s stock basis on December 31?;What are Allie?s stock basis and debt basis on December 31?;What loss carryovers are available for Monte and Allie?;Explain how the use of the losses in Part a would change if instead Raider were a partnership and Monte and Allie were partners who shared profits, losses and liabilities equally.;Problem 5;Eric and Denise are partners in ED Partnership. Eric owns a 60% capital, profits and loss interest. Denise owns the remaining interest. Both materially participate in the partnership activities. At the beginning of the current year, ED?s only liabilities are $50,000 in accounts payable, which remain outstanding at year-end. In August, ED borrowed $120,000 on a nonrecourse basis from Delta Bank. The loan is secured by property with a $230,000 FMV. These are ED?s only liabilities at year-end. Basis for the partnership interest at the beginning of the year is $40,000 for Denise and $60,000 for Eric before considering the impact of liabilities and operations. ED has a $200,000 ordinary loss during the current year. How much loss can Eric and Denise recognize?;Problem 1;Your client, a physician, recently purchased a yacht on which he flies a pennant with a medical emblem on it. He recently informed you that he purchased the yacht and flies the pennant to advertise his occupation and thus attract new patients. He has asked you if he may deduct as ordinary and necessary business expenses the costs of insuring and maintaining the yacht. Explain the steps taken to find your answer.


Paper#79976 | Written in 18-Jul-2015

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