Question 1: What are swaps? How can they be used by a corporation?
Question 2: A company holds convertible bonds. Without the convertible bonds, the ownership in an investment is 18% control; with the bond conversion, it is 21%. How should the investment be shown on the financials? Cost or equity? Is it possible to go from the cost method, to equity, to consolidated, based on additional equity investments?
Question 3: What is meant by incremental investing as it pertains to a corporation? How will this affect the investment's accounting? Equity method, what is it? What kind of disclosure is required? Why do you think the accounting rules require this type of disclosure?
Question 4: Real estate is the cornerstone of many investment portfolios. If the government took away the tax benefits, do you think people would still invest in real estate? Why or why not?
Question 5: How do we determine the basis of property acquired by a gift? Does it make any difference if there is a difference between FMV and cost in the hands of the donor? Which basis number (cost or FMV) is used by the beneficiary (donee) to compute depreciation?
Question 6: How is a non business bad debt treated on a tax return? Is there a limitation on how large of a loss you can deduct?
Question 7: Why do you think IRC Section 1031 was introduced into tax legislation and how does it benefit taxpayers?
Question 8: Suppose Jim and Jane live in their primary residence for one year and then get divorced. As part of the divorce title to the home is retained entirely by Jim, but Jane is allowed to live in the home until the children are age 18 (another 4 years). At that time Jim sells the home for a $280,000 gain. How much of this gain can Jim exclude from his tax return? Don't forget ... he only lived there for one year, and at the time of the sale he is not married to Jane.
Question 9: Assume that you make a non-taxable exchange in 2010. You acquired your property in 2001 and the newly acquired property was purchased by the original owner in 1992. Eventually, when you sell the property, what will be listed as your date of acquisition? Provide documentation for your answer.