On a 2021 tax return, how, if at all, would you recover the cost you pay for a noncompete agreement (or “covenant not to compete”) in the context of your pur-chase of all of the assets of a going-concern accounting practice?     (a)  Straightline amortization over the covenant’s term.      (b)  Straightline amortization over 15 years (180 months).   (c)  Straightline amortization over the shorter of (a) or (b).   (d)  Straightline amortization over the longer of (a) or (b).   (e)  Section 179 “expensing.”   (f)  None of the above statements is true

! Required information Problem 7-45 (LO 7-2) (Algo) [The following information applies to the questions displayed below.] Matt and Meg Comer are married and file a joint tax return. They do not have any children. Matt works as a history professor at a local university and earns a salary of $69,600. Meg works part time at the same university. She earns $33,800 a year. The couple does not itemize deductions. Other than salary, the Comers' only other source of income is from the disposition of various capital assets (mostly stocks). (Use the tax rate schedules, Dividends and Capital Gains Tax Rates.) Note: Round your final answers to the nearest whole dollar amount. Problem 7-45 Part-a (Algo) a. What is the Comers' tax liability for 2022 if they report the following capital gains and losses for the year? $ 9,800 (2,400) Short-term capital gains Short-term capital losses Long-term capital gains Long-term capital losses 15,800 (6,400) Total tax liability

Taxable income and pretax financial income would he identical for Huber Co, except for its treatments of gross profit on installment sales and estimated costs of warranties. The following income computations hawe been prepared. The tax rates in effect are 2024, 20%; 2025 and 2026, 25%. All tax rates were enacted into law on January 1, 2024, No deferred income taxes existed at the beginning of 2024. Taxable incorne is expected in all future years. Prepare the journal entries to record income tax expense, deferred income taxes, and income taxes payable for 2024, 2025, and 2026. (List oll debit entries before credit entries. Credit occount titles ore outomotically indented when amount is entered. Do not indent monually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)Date Account Titles and Explanation Debit Credit Income Tax Expense Deferred Tax Asset Income Tax Payable Deferred Tax Liability c. 31,2025vv Income Tax Expense Deferred Tax…

Larkspur Construction Company changed from the completed-contract to the percentage-of-completion method of accounting for long-term construction contracts during 2021. For tax purposes, the company employs the completed-contract method and will continue this approach in the future. (Hint: Adjust all tax consequences through the Deferred Tax Liability account.) The appropriate information related to this change is as follows.     Pretax Income from:     Percentage-of-Completion   Completed-Contract   Difference 2020   $735,000   $564,000   $171,000 2021   651,000   440,000   211,000 (a) Assuming that the tax rate is 40%, what is the amount of net income that would be reported in 2021? Net income   $Enter the net income in dollars  (b) What entry is necessary to adjust the accounting records for the change in accounting principle? (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is…

Blossom, Inc. uses the accrual method of accounting for financial reporting purposes and appropriately uses the installment method of accounting for income tax purposes. Installment income of $3500000 will be collected in the following years when the enacted tax rates are:   Collection of Income Enacted Tax Rates 2020 $400000 25% 2021 700000 20% 2022 990000 20% 2023 1410000 15% The installment income is Blossom's only temporary difference. What amount should be included in the deferred income tax liability in Blossom's December 31, 2020 balance sheet? $669500 $875000 $549500 $775000

Danforth Inc. has some financial transactions occurring in 2021 that result in future taxable amounts.  Which of the following item results in future taxable amounts?   Question 20 options:   a)  $95,000 of subscription magazine revenue that is received in 2021 by Danforth and relates to magazines shipped to customers in 2022.   b)  $19,00 of prepaid rent that is paid by Danforth to another entity in 2021 but will be used in 2022.    c)  $25,000 of interest received by Danforth from municipal bonds.   d)  $72,000 of salaries and wages that are recorded by Danforth as an expense in 2021 but not paid until 2022.

Pole Co. at the end of 2018, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows:   Use of the depreciable assets will result in taxable amounts of €350,000 in each of the next three years. The estimated litigation expenses of €840,000 will be deductible in 2021 when settlement is expected. Instructions a) Prepare the journal entry to record income tax expense, deferred taxes, and income taxes payable for 2018, assuming a tax rate of 40% for all years

Which of the following statements regarding the home mortgage interest expense deduction is false for a single taxpayer?   Taxpayers may deduct all of the interest paid on up to $1,000,000 of acquisition debt if the debt occurred in January of 2017.   Taxpayers may deduct all of the interest paid on up to $750,000 of acquisition debt if the debt occurred in January of 2018.   If, in 2021, a taxpayer refinances acquisition debt that was originally incurred in January of 2017, the taxpayer may deduct the interest on up to only $750,000 of the refinanced loan.   None of the choices is false.

For 2022, MSU Corporation has $500,000 of adjusted taxable income, $22,000 of business interest income, and $120,000 of business interest expense. It has average annual gross receipts of more than $27,000,000 over the prior three taxable years. a.  What is MSU's interest expense deduction for 2022? b.  How much interest expense can be deducted for 2022 if MSU's adjusted taxable income is $300,000?

H6. Explain wrong options and explain with details