Prentice Hall's Federal Taxation 2014 Corporations, 27e Chapter 12

Examples of gifts and payments include but are not limited to: meals, travel and travel accommodations, tickets to

Under the Reg. §1.47-3(f) (5) (ii), the transferor of the section 38 property in any taxable year dose not retain a substantial interest in the trade or business directly or indirectly. According to this code, the transferor does not need to make the payment for tax of the interest during the property transaction only if the property can be qualified to “section 38 property” which indicate property (1) with respect to which depreciation is allowable to the taxpayer (2) has an estimated useful life of 3 years or more (3) which is tangible personal property or other tangible property. In this case, the machinery purchased by the individual two years ago can be applied for the “section 38 property” which also means the transferor does not need to pay for the interest happened during the transaction. And because of the gift of stock made by the individual caused a reduction in his interest. Which occurred at a time when the useful lives were just taken into account in computing the credit about the “section 38 property”. Unless his remain interest is a substantial interest, the section 47(b) would no longer be applicable and total

____ 27. In a § 351 transaction, Gerald transfers equipment worth $85,000 (basis of $120,000) in

(3) What amount of loss is allocable to the limited partner, Dr. Ashin, in this taxable year?

(TCO B) From the information given below, determine Marcie's gross income for tax purposes. Salary $40,000 Interest (checking account) $50 Cash received as birthday gift $900 Dividends (mutual funds) $500 Inheritance received on father's death $22,000 Cash received from insurance for accident

1. All distributions (excluding reasonable salary) to Paula and Mary will be taxed as dividends to them. And the corporation could not deduct this part of distribution.

In return, Helen receives 100 shares in Red Corporation. With respect to the transfers, (Points : 2)

Issue: SSD has been experiencing a volatile market with fluctuating sales. In year 2, SSDS only made $10k. In that same year, SSDS made a charitable contribution of $50k to a 501(c)(3) charity.

3. (p. 78) Individuals are allowed to give money or items of any value to a person without being subject to taxes.

30. In 2011, José, a widower, sells land (fair market value of $100,000) to his daughter, Linda, for $50,000. José has made a taxable gift of $37,000.

7. A gift received for opening a bank account is not taxable income to the recipient.

When a life event, such as a death in the family, occurs and you are uncertain what the tax implications are, it is best to seek out the expertise of a CPA to help answer your tax questions. “My aunt passed away and left me some money . . . . Is it taxable?” Like most tax questions, that answer depends on the answers to several other questions. Usually the answer is NO. However, there are instances where you will pay income tax on money you receive as an inheritance, or taxed on the income that the assets you inherited generate.

2010 Corporate Partnership Estate and Gift Tax with H&R Block TaxCut 4e Pratt Kulsrud Test Bank

A charitable trust described in Internal Revenue Code segment 4947(a)(1) is a trust that is not charge absolved, the greater part of the unexpired interests of which are committed to one or more altruistic purposes, and for which a magnanimous contribution reasoning was permitted under a particular section of the Internal Revenue Code. A magnanimous trust is dealt with as a private establishment unless it meets the prerequisites for one of the exclusions that groups it as an open philanthropy. Subsequently, it is liable to the private establishment extract charge provisions and alternate arrangements that apply to excluded private establishments, including end prerequisites and overseeing instrument requirements.  However, an altruistic trust is not regarded as a charitable association for motivations behind exception from tax.  Accordingly, the trust is liable to the extract charge on its speculation pay under the guidelines that apply to assessable establishments as opposed to those that apply to impose absolved establishments.

The fourth clause governs the receipt of gifts, the exceptions thereof, and disclosure procedures. Interestingly, the exceptions list is longer than the gift rule itself. For example gifts from immediate family members or those with whom you have a close personal friendship are acceptable, which seems logical.