X an individual not a dealer owns land and a building

(1)X an individual not a dealer owns land and a building. X sold the property to Y for $50 000. X basis was $17 500 and the property was encumbered by a mortgage of $25 000. Y assumed the mortgage. X incurred $2 500 of selling expenses and received a payment of $10 000 in cash. The remainder ($15 000) is to be paid over 5 years at $3 000 per year plus interest. Assume that there is no depreciation recapture.(a) Calculate:(1) the “Contract Price”(2) the Gross Profit Ratio(3) the amount of gain to be reported in the year of sale.(b) What are the consequences if Y was X’s wholly?owned corporation?(c) Suppose Y is X’s brother?in?law. X waives a $3 000 payment as a wedding gift. What are the income tax consequences?Just computations is not enough need full explanation of answer so that I can properly understand and study this problem.(2)FFC Properties Inc.is a subsidiary of FFC International the Fast Fried Chicken people. CYC Properties acquires land and builds stores for FFC’s retail outlets. On September 30 2016 an appropriate building site is acquired in Summit New Jersey. The land cost $500 000. Properties pays 20% down ($100 000) and obtains an interest only mortgage of 3% on a mortgage of $600 000. The mortgage is used to pay the remaining $400 000 for the purchase price of the land and an additional $200 000 to construct the building. Interest must be paid monthly and the principal is payable in 3 years. Thus interest accrues at $1 500 per month. After some soil testing and other preconstruction activities construction begins on December 1 2016. The building is completed and is occupied on April 1 2017 and FFC begins retail operations on that date. When do interest and taxes need to be capitalized?Just computations is not enough need full explanation of answer so that I can properly understand and study this problem.(3)Barbie’s Bridal is engaged in the bridal business. Its sells several lines of crystal china and silver. It also provides a “Total Bridal Service.” For the Total Bridal Service Barbie’s Bridal arranges and decorates the place where the ceremony is going to take including flowers music programs photographs etc. There are several options on the Bridal Service.(a) Regarding the crystal china and silver since people’s taste change patterns go out of demand and are not replaced. However an inventory of stock is maintained for people who might want another setting or to replace a broken item. Because of the decline in demand Barbie’s Bridal has excess inventory. If Barbie’s Bridal uses Lower Cost or Market what must Barbie’s Bridal do to write down its inventory if it uses lower of cost or market?(b) Barbie’s Bridal contracts with several wholesale florists to provide flowers for its Bridal Service. The IRS wants Barbie’s Bridal to use inventories for the flowers to clearly reflect income. Barbie’s Bridal asks you if it needs to use inventories for its flowers.Just computations is not enough need full explanation of answer so that I can properly understand and study this problem.(4)The Glass Corporation incurs a $50 000 net operating loss for the year ending December 31 2016.(a) It carries back the loss to 2014. For 2014 Glass showed taxable income of $25 000 and paid a tax of $7 500 (assume a 30% rate). Upon audit of the claim for refund in 2018 it is discovered that Glass had unreported gross income for 2014 of $30 000. 2014 is now a closed year. Can Glass receive a refund for 2014?(b) If you were advising Glass and you knew about the omission of income for 2014 what would you advise regarding the 2016 net operating loss?Just computations is not enough need full explanation of answer so that I can properly understand and study this problem.(5)A Corporation owns a building with a basis of $50 000 that it uses in its business. In 2016 it sells the building to B for $250 000 and receives a promissory note of $225 000 and cash of $25 000. In order to utilize an expiring capital loss carryforward it elects to report the income ($200 000) in the year of sale. The gain is §1231 gain and since A has no other §1231 gains for the year it is reported as a capital gain.It is determined in 2017 that A did not make certain improvements that it was obligated to make before the sale. A pays B $20 000 in settlement of its obligation. How should this be treated?Just computations is not enough need full explanation of answer so that I can properly understand and study this problem.(6)Fleet Electric Corp.supplies electric to the residents of Montana. In January 2017 Fleet applies for a 2% rate increase. Under the rules of the Montana Board of Public Utilities Fleet is permitted to charge the higher rates while its application is pending. Once approved the rate increase is effective as of the time of the application for the rate increase. In January 2018 the Board of Public Utilities grants Fleet a 1% rate increase. Fleet must refund the additional charges back to the customers.(a) If Fleet refunds all of the money during the remainder of 2018 can Fleet use §1341 to mitigate the taxes on the amounts collected in 2017 and refunded in 2018?(b) Assuming §1341 applies would §1341 mitigate the tax impact under the following: 2017 Reported Taxable Income $6 000 000 Correct Taxable Income $4 000 000 Tax on $6 000 000 $1 500 000 Tax on $4 000 000 $800 000 2018 Taxable Income Before Repayment $8 000 000 Taxable Income After Repayment $6 000 000 Tax on $8 000 000 $2 400 000 Tax on $6 000 000 $1 500 000(c) If the Board of Public Utilities ruled in November 2017 and Fleet refunded all of the excess amounts in 2017 how should Fleet report the income and the payment?Just computations is not enough need full explanation of answer so that I can properly understand and study this problem.