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- Rhea Xu is a self-employed professional singer. She resides in a rented apartment and uses one room exclusively as a business office. This room includes 405 of the 2,700 square feet of living space in the apartment. Ms. Xu performs in recording studios and concert halls, but she conducts all of the administrative duties with respect to the business in her home office. This year, Ms. Xu's apartment rent was $60,000. She paid $6,400 to a housekeeping service that cleaned the entire apartment once a week and $3,200 for renter's insurance on the apartment furnishings. Required: a. Compute Ms. Xu's home office deduction assuming that her net profit before the deduction was $420,000. b. Compute Ms. Xu's home office deduction assuming that her net profit before the deduction was $5,200. Complete this question by entering your answers in the tabs below. Required A Required B Compute Ms. Xu's home office deduction assuming that her net profit before the deduction was $420,000. Home office…Helen invested $5,000 on a new computer for her company. She uses the computer for business 35 percent of the time and for personal purposes 65 percent of the time. what is the business cost of the computer she uses to calculate her Section 179 deduction?Rose works as a quality in-charge in an equipment manufacturing firm in the UK. During the tax year 2019/20, she has earned income from different sources. She earned £88,800 through employment income. She is also doing a business through which she earned a taxable income of £16,000. She invested £82,000 in equity and earned £10,800 dividend income. In the year 2018, she made investment in business society and received £4,600 interest during this tax year. She also invested ISA and received interest income of £24,000. She has a taxable rental income of £4,000 from properties. Situation 1 You are required to calculate Rose’s income tax liability for the year 2019/20. Situation 2 Assume Rose has paid £4,000 towards a gift aid donation during the year 2019/10, re-assess her tax liability.
- Francis bought his primary residence for $175,000 in the summer of 2017. At closing, he also paid $500 for title insurance and $215 to record the deed. In the spring of 2021, Francis paid $1,625 to remodel the master bath. In the late summer of 2021, he spent $150 for supplies to paint the first floor rooms. In the fall of 2021, Francis replaced the furnace with a qualified energy- efficient one. He spent $1,500 for the new furnace and claimed a $450 credit for it on his 2021 tax return. What is Francis's adjusted basis in the house? $177,890 $178,125 $178,390 $179,440In 2014 Jack suffered bodily injury while at work. In 2016, Jack won a workers' compensation claim and prevailed in an injury lawsuit, both in connection with the 2014 injury. Jack received the following in 2016 as settlement: Punitive damages $150,000 Workers' compensation $50,000 Personal physical injury damages $25,000 Compensation for emotional distress caused by the physical injury $15,000 What amount of the settlement should be excluded from Jack's 2016 gross income? $25,000 $165,000 $90,000 $75,000Andrew has been employed as a pharmacist by Boots and earning an annual salary of €80,000. He decides to leave and open his own independent pharmacy. His annual expenses will include €12,000 for office rent, €1,000 for equipment rental, €50,000 for supplies, €2,000 for utilities, and a €20,000 salary for part-time employee. Andrew will cover some expenses by using his savings of €20,000 on which he was earning annual interest of €1,000. Annually, Andrew pays himself the difference between revenue and expenses. 3. Andrew's implicit cost in the first year of setting up his own practice is A. €80,000 B. €81,000 C. €101,000 D. €186,000 E. €1,000 4 4. What revenue would Andrew's business have to earn in the first year for Andrew to be better off by €20,000 relative to working at Boots? €81,000 A. B. €101,000 C. €126,000 D. €206,000 E. €165,000
- Florence is employed by Sparkling Drinks Limited and earns a salary of $40,000 per month. Her taxable benefits are: housing accommodation $30,000 per month; company car $65,000 (cost $750,000 six years ago, 60% private use). During the year of assessment 2013 on her building society savings account, Florence earned $1,500 interest gross from which $375 withholding tax was deducted. She also earned $3,000 interest gross on a bank fixed deposit (withholding tax $750). For the period January to December 2013 Florence paid $83,172 by PAYE. Note NIS is 2.5% of total emoluments Income tax threshold is $507,312 Calculate the balance of tax due from Florence to the Inland Revenue Department for the year of assessment 2013Godo In 2017, Karen purchased a house for $150,000 to use as her personal residence. She paid $30,000 and borrowed $120,000 from the local savings and loan company. In 2020, she paid $20,000 to add a room to the house. In 2022 she paid $2,400 to have the house painted and $1,200 for built-in bookshelves. As of January 1 of the current year, she has reduced the $120,000 mortgage to $108,300. What is her basis for the house?Jinhee Ju, 27, just received a promotion at work that increased her annual salary to $40,000. She is eligible to participate in her employer's 401(k) plan, to which the employer matches dollar-for-dollar workers' contributions up to five percent of salary. However, Jinhee wants to buy a new $25,000 car in 4 years, and she wants to save enough money to make a $8,000 down payment on the car and finance the balance. Also in her plans is a wedding. Jinhee and her boyfriend, Paul, have set a wedding date 2 years in the future, after he finishes medical school. Paul will have $95,000 of student loans to repay after graduation. But both Jinhee and Paul want to buy a home of their own as soon as possible. This might be possible because at age 30, Jinhee will be eligible to access a $55,000 trust fund left to her as an inheritance by her late grandfather. Her trust fund is invested in 8 percent government bonds. a. Justify Jinhee's participation in her employer's 401(k) plan using the time…
- Reba Dixon is a fifth-grade school teacher who earned a salary of $38,000 in 2021. She is 45 years old and has been divorced for four years. She receives $1,200 of alimony payments each month from her former husband (divorced in 2016). Reba also rents out a small apartment building. This year Reba received $50,000 of rental payments from tenants and she incurred $19,500 of expenses associated with the rental.Reba and her daughter Heather (20 years old at the end of the year) moved to Georgia in January of this year. Reba provides more than one-half of Heather’s support. They had been living in Colorado for the past 15 years, but ever since her divorce, Reba has been wanting to move back to Georgia to be closer to her family. Luckily, last December, a teaching position opened up and Reba and Heather decided to make the move. Reba paid a moving company $2,270 to move their personal belongings, and she and Heather spent two days driving the 1,620 miles to Georgia.Reba rented a home in…Omar lives in a company flat that cost his employer £105,000 in June 2015.The annual value of the flat is £2,500. The accommodation is not job-related. Calculate Omar taxable benefit for the tax year 2020/21Leon Martin is single and has never been married. Leon earned wages of $23,000 during the first half of the year. Leon lost his job in July and received a total of $9,000 in unemployment compensation. Leon is a barber and took a class at the community barber college to improve his barbering skills. He paid the cost of tuition and a course-related book. His qualified education expenses were $2,500. Leon also paid student loan interest for the courses he previously took to earn his Bachelor’s degree. For 2022, he paid student loan interest of $550. Leon does not have any dependents. Leon is a U.S. citizen with a valid Social Security number. 11. What is the taxable amount of Leon's unemployment compensation? A. $0 B. $4,500 C. $9,000 D. $10,200