A corporate taxpayer plans to build a​ $6 million office building during the next 18 months

A corporate taxpayer plans to build a​ $6 million office building during the next 18 months. How must the corporation treat the interest on debt paid or incurred during the production​ period?


QI:5-10
Andy owns an applicance store where he has merchandise such as refrigerators for sale.​ Roger, a​ bachelor, owns a​ refrigerator, which he uses in his apartment for personal use. For which individual is the refrigerator a capital​ asset?


QI:5-13

In

20022002​,

 Florence purchased 30 acres of land. She has not used the land for business purposes or made any substantial improvements to the property. During the current​year, she subdivides the land into 15 lots and advertises the lots for sale. She sells four lots at a gain.

a. What is the character of the gain on the sale of the four​ lots?

b. Explain how the basis of each lot would be determined.

QI:5-15
Four years​ ago, Susan loaned​ $7,000 to her friend Joe. During the current​ year, the​ $7,000 loan is considered worthless. Explain how Susan should treat the worthless debt for tax purposes.