Tax Problem

HOPE Scholarship Credit and Lifetime Learning Credit. John and Mary, a married couple who file a joint return, have two dependent children in college, Jeff and Brooke. Jeff attends Pepper College, a private, liberal arts college, and Brooke attends State U. During the calendar year 2006, Jeff was a sophomore during the Spring Semester 2006 and a junior during the Fall Semester 2006. Brooke was a freshman during the Fall Semester 2006 and was in high school during the Spring Semester 2006. Below are the college expenses paid by John and Mary for Jeff and Brooke during 2006:

Tax Saving Strategy

1. Allan and Sarah are not married. Sarah has a low income but Allan has a high income. a. How might a loan from Sarah to Allan be advantageous to them? b. How might it be advantageous for Allan to rent something from Sarah? 2. Allan and Sarah are married. Allan passes away and Sarah is the sole beneficiary of Allan's IRA. Marge has the option of rolling over Allan's IRA into her own IRA. Why might Sarah prefer not to roll over Allan's IRA as her own?

Partnership Basis in Land

Betty's basis in her partnership interest is $90,000 and she receives distributions of $35,000 cash and inventory (basis to the partnership of $22,000 and a fair market value of $28,000). No land is distributed. (A) How much gain or loss, if any, must Betty recognize as a result of the distribution. (B) What basis will Betty take in the inventory? (C) What are the tax consequences to the partnership. (D) Can you recommend an alternate distribution? (E) Would your answer to (A) or (B) change if this had been a nonliquidating distribution?

Dependency Exemptions, filing requirements, and installment sale

See attached file for full problem description.

Taxation questions for S Corporations

Are these true or false. I think I have a pretty good idea of what constitutes as S corporation but these questions I'm not sure of. Thanks for your advice. (1) An S corporation election allows shareholders to realize tax benefits from losses immediately. (2) A NOL carryover from a C year can be used in an S corporation year. (3) An estate may be an S corporation shareholder. (4) An insurance company can be an S Corporation. (5) An S corporation is allowed to own wholly owned S corporation subsidiaries. (6) A husband and wife are considered as one shareholder for S corporation purposes.