TABLE OF CONTENTS

TABLE OF CONTENTS

REFERENCES, ABBREVIATIONS, ETC

PREFACE

PROBLEMS

INTRODUCTORY

PROBLEM 1.

PROBLEM 2.

1

PROBLEM 3.

PROBLEM 4.

Illustrating Personal Service Corporations

Illustrating Taxability As Personal Service Corporation

-Foreign Corporation

Illustrating Taxability of Dividends Distributed By a

Personal Service Corporation Out of Earnings Accu-

mulated Prior To March 1, 1913; subsequent to Feb.

28, 1913 but prior to January 1, 1918; subsequent to

Dec. 31, 1917 but prior to January 1, 1922; subsequent

to Dec. 31, 1921 .

Illustrating Taxability of Dividends Paid In Liberty

Bonds

PROBLEM 5. Illustrating Taxability of Cash Dividends Declared Pay-

able Out of Depletion Reserve

Illustrating Taxable Profit on Sale of Stock Where Stock

Dividend Involved

PROBLEM 6.

PROBLEM 7.

Illustrating Taxable Net Income On Sale of Dividend

Stock

PROBLEM 8.

3

5

5

8

9

Illustrating Taxability of Cash Dividend Paid Out of

Earnings Accumulated in Part Prior to March 1, 1913,

and in Part on or Subsequent to That Date

PROBLEM 9. Illustrating Computation of Loss on Sale of Stock or

Shares on Which Dividend has been Received From

Earnings Accumulated Prior to March 1, 1913

PROBLEM 10. Illustrating Computation of Profit or Loss on Sale of

Capital Stock on Which Liquidating Dividend has

Been Paid

Illustrating Effect of Stock Dividend With Subsequent

Redemption or Cancellation of Stock So Distributed

Illustrating Taxability of Dividends Received in One

Year, Distributed From Earnings Accumulated in

Prior Years

PROBLEM 13. Illustrating Taxability of Dividends Paid in One Calen-

dar Year and Received By Stockholder in Succeeding

Year

PROBLEM 14.

PROBLEM 15.

10

11

12

13

14

15

Illustrating Method of Determining Gain or Loss From

the Scale of Property Acquired After March 1, 1913 16

Illustrating Basis for Determining Gain or Loss From

the Sale of Property Which Should be Included in

Inventory

17

PROBLEM 16. Illustrating Basis of Computing Gain Derived or Loss

Sustained From the Sale of Property Acquired by Gift

on or Prior to December 31, 1920

PROBLEM 17. Illustrating Basis for Computing Gain Derived or Loss

Sustained from Sale of Property Acquired by Gift

after December 31, 1920.

PROBLEM 18. Illustrating Basis for Determining the Gain Derived or

Loss Sustained from the Sale of Property Received by

Inheritance After February 28, 1913

PROBLEM 19. Illustrating Method of Determining Gain Derived from

the Sale of Property Acquired by Bequest Prior to

March 1, 1913 in Case the Fair Market Value as at

March 1, 1913 was in Excess of Value at Date of Ac-

quisition but Less Than the Selling Price .

PROBLEM 20. Illustrating Basis of Computing Amount of Loss Sus-

tained from Sale of Property Received as a Bequest in

Case Selling Price is Less than Value at Date of Ac-

quisition and also Less than Fair Market Value March

1, 1913

PROBLEM 21. Illustrating Method of Determining Amount of Taxable

Profit Derived or Loss Sustained from the Sale of

Property Received as a Bequest Prior to March 1,

1913 in Case the Market Value at Date of Acquisition

is Less than Selling Price but March 1, 1913 Value is

Greater than Selling Price .

PROBLEM 22. Illustrating Method of Determining Amount of Taxable

Profit Derived or Loss Sustained from the Sale of

Property Received As a Bequest Before March 1, 1913

in Case the Market Value at March 1, 1913 is Less

than Selling Price, but Market Value at Date of Ac-

quisition is Greater Than Selling Price

PROBLEM 23. Illustrating Basis for Determining Amount of Taxable

Profit Derived from Sale of Property Purchased prior

to March 1, 1913 in Case the Cost is Greater than

March 1, 1913 value and Less Than Selling Price.

PROBLEM 24. Illustrating Method of Determining Gain from Sale of

Property Acquired by Purchase Prior to March 1,

1913 in Case the Fair Market Value of the Property

on March 1, 1913 is Greater Than Cost but Lower

than Selling Price.

.

PROBLEM 25. Illustrating the Basis for Determining Gain or Loss

When Property is Exchanged for Property not Having

a Readily Realizable Market Value

PROBLEM 26. Illustrating the Basis for Determining Gain or Loss

When Property is Exchanged for Property of a Like

Kind or Use .

PROBLEM 27. Illustrating Basis for Determining Gain or Loss, When

in a Reorganization Stock of One Corporation is Ex-

changed for Stock of Another Corporation a Party to

the Reorganization

PROBLEM 28.

PROBLEM 29.

Illustrating Result of Exchanging Property for Stock in

a Corporation Whose Stock is Closely Held

Illustrating the Basis for Determinng Gain or Loss on

the Sale of Property Received in Exchange for Other

Property in Case No Gain or Loss Was Recognized as

a Result of the Exchange

PROBLEM 30. Illustrating the Computation of Taxable Gains on Prop-

erty Compulsorily or Involuntarily Converted into

Cash or its Equivalent.

PROBLEM 31. Illustrating Basis for Determining Gain or Loss from

the Sale of Securities Which Were Purchased Within

Thirty Days After a Sale of Substantially Identical

Property Made At a Loss Subsequent to 3:55 P. M. of

November 23, 1921 .

PROBLEM 32. Illustrating Basis for Determining Gain or Loss When

Property is Exchanged for Other Property Which Has

No Readily Realizable Market Value Together With

Money or Other Property Which Has a Readily Realiz-

able Market Value

PAGE

31

32

36

.

37

PROBLEM 33. Illustrating Basis for Determining Gain or Loss for the

Taxable Year from the Sale of Property Sold under

Contract Providing for Payment in Installments

Illustrating Necessity of Inventories to Clearly Reflect

Income

PROBLEM 34.

PROBLEM 35.

PROBLEM 36.

PROBLEM 37.

PROBLEM 38.

38

39

41

45

48

Illustrating Basis for Computation of Inventory

Illustrating Computation of "Net Loss"

Illustrating Deductibility by a Corporation of Net Loss

of One Year From Taxable Income of a Later Year.

Illustrating Computation of Net Loss of One Year De-

ductible From Taxable Income of a Later Year in the

Case of a Partnership

PROBLEM 39. Illustrating Computation of Net Loss of One Year De-

ductible From Taxable Income of a Later Year in the

Case of an Estate .

Illustrating Computation of Net Loss in the Case of a

Taxpayer Reporting on a Fiscal-Year Basis.

Illustrating Computation of Tax on Individuals-Fiscal

Year 1920-1921

Illustrating Adjustments for Payments of Tax Made

Prior to the Passage of the 1921 Act on Fiscal Year

1920-1921

Illustrating Computation of Tax on Individuals-Fiscal

Year 1921-1922 .

Illustrating Computation of Income and Profits Taxes
for a Fiscal Year Ended in 1921.
Illustrating Computation of Income and Profits Taxes
for a Fiscal Year Ended in 1922 .
Illustrating Computation of Tax Against a Personal
Service Corporation-Fiscal Year 1921-1922

Illustrating Capital Gain

56

PROBLEM 45.

64

PROBLEM 46.

PROBLEM 47.

PROBLEM 50.

Illustrating Capital Deductions and Capital Net Gain 70

Illustrating Ordinary Net Income as Distinguished from

Capital Gain

70

PROBLEM 51.

Illustrating the Meaning of Capital Assets as That

Term is Used in Connection with Capital Gain or Cap-

ital Loss.

PROBLEM 52. Illustrating Computation of Tax of an Individual in

71