1. Daytona Corporation, a manufacturing corporation, aquires the following business assets in the current year:
* Furniture, Plumbing fixtures, Land, Goodwill and a trademark acquired in the acquistion of a business, Automobile, Heavy truck, Machinery, Building used in manufacturing activities
a. Discuss which of the assets above are eligible for depreciation under the MACRS rules or amortization. Give reasons.
b. Discuss what recovery period should be used for each of the assets listed above that come under the MACRS rules or under Sec. 197. Give reasons.
2. Discuss the circumstances in which a liquidating corporation does not recognize gain and/or loss when making a liquidating distribution.
3. Describe various advantages and disadvantages of disposing of property by gift instead of at death, assuming an estate tax is in effect.
4. The IRS informs Brad that it will audit his current year employee business expenses. Brad just met with a revenue agent who contends that Brad owes $775 of additional taxes. Discuss procedural alternatives to Brad.