Martha, an accrual method taxpayer, has an accounting practice. In 2020, she performs tax analyses for Arnold and sends him an invoice for $10,000. In 2021, Martha sells her practice and all accounts to David. Arnold's debt becomes worthless that year after David has purchased the practice. The result is   a. Martha deducts a nonbusiness bad debt in 2021.   b. Martha deducts a business bad debt in 2021.   c. David deducts a business bad debt in 2021.   d. David deducts a nonbusiness bad debt in 2021.

Juanita is a single and is self-employed. Juanita owed $1,300 in taxes on her 2019 return andexpects her taxes to be the same for 2020. Which of the following statements is correct?Select one:a. Juanita will not be required to pay estimated tax payments for 2020.b. Juanita will not be subject to self-employment tax.c. Juanita should take out a loan to pay her 2020 taxes when she files the return.d. Juanita should make estimated tax payments to avoid an underpayment penalty.

Jolene filed her tax return by its original due date but did not pay the $2,000 in taxes she owed with the return until one and a half months later. Her late filing and late payment penalty would be?

Sally owns real property for which the annual property taxes are $12,930. She sells the property to Kate on April 2, 2020, for $646,500. Kate pays the real property taxes for the entire year on October 1, 2020. a.  How much of the property taxes can be deducted by Sally and how much by Kate? b.  What effect does the property tax apportionment have on Kate's adjusted basis in the property? c.  What effect does the apportionment have on Sally's amount realized from the sale? d.  How would the answers in parts (b) and (c) differ if Sally paid the taxes?

Joan filed her individual income tax return 3 months after it was due. She did not request an extension of time for filing. Along with her return, Joan remitted a check for $125, which was the balance of the taxes she owed with her return. Disregarding interest, calculate the total penalties that Joan will be required to pay, assuming the failure to file was not fraudulent.

How does the tax benefit rule apply in the following cases? a.  In 2019, the Orange Furniture Store, an accrual method sole proprietorship, sold furniture on credit for $1,000 to Sammy. The cost of the furniture was $600. In 2020, Orange took a bad debt deduction for the $1,000. In 2021, Sammy inherited some money and paid Orange the $1,000 he owed. Orange's owner was in the 35% marginal tax bracket in 2019, the 12% marginal tax bracket in 2020, and the 35% marginal tax bracket in 2021. Orange Furniture must include $fill in the blank 102a7e000ffcfe0_1 in gross income as the recovery of a prior deduction. The timing of the income and deductions cost Orange $fill in the blank 102a7e000ffcfe0_2.   b.  In 2020, Marvin, a cash basis taxpayer, took a $2,000 itemized deduction for state income taxes paid; the deduction was not limited by the SALT cap. This increased his itemized deductions to a total that was $800 more than the standard deduction. In 2021, Marvin received a…

In 2020, Sally is single and has business income totaling $ 100,000 from a business classified as a specialized service business. This business did not pay any wages or have any qualified assets. Sally also has $ 10,000 in dividend income from a Real Estate Investment trust, and $ 55,000 in qualified dividends from Microsoft. Sally’s 2020 taxable income (before any QBI deductions is $ 145,000. Calculate Sally’s deduction for qualified business income. a. $ 0 b. $ 2,000 c. $ 18,000 d. $ 20,000 e. $ 22,000

Quince owns a used-car lot where Ray works as a salesperson. Quince tells Ray not to make any warranties for the cars. To make a sale to Sylvia, however, Ray adds a 50,000-mile warranty. Later, Sylvia sues Quince for breach of warranty. Quince may hold Ray liable for any damages he must pay to Sylvia under which remedy:   a. indemnification   b. avoidance   c. constructive trust   d. accounting

Keith has a 2020 tax liability of $2,250 before taking into account his American Opportunity tax credit. He paid $2,600 in qualifying expenses, was a full-time student, was not claimed as a dependent on his parents' return, and his American Opportunity tax credit was not subject to phase-out. What is the amount of his American Opportunity tax credit allowed? a.$2,600 b.$0 c.$2,150 d.$2,250 e.$4,000

Carrie, a single taxpayer, finished her undergraduate degree using money from a student loan. She earned $56,000 her first year and paid $2,600 in interest in 2021. She can take a deduction for student loan interest in the amount of: a.$0 b.$2,500 c.$2,600 d.$1,500 e.None of these choices are correct