which of the following statements is correct?
Q: Se Ri Pak, age 23, recently graduated with her bachelor’s degree in library and information…
A: Annuity means a series of finite number of payments which will be made at equal intervals. Annuity…
Q: Ali has a small construction company. During the year, he paid Will for various subcontracting jobs.…
A: A Federal Employer Identification Number (FEIN) is a unique nine-digit number assigned by the…
Q: $1,200 of alimony payments each month from her former husband (divorced in 2016). Reba also rents…
A: Taxable income refers to the income or profit earned by an individual or an entity in a desired…
Q: You are preparing Timmy’s 2020 tax return. How much will you include as can-cellation of debt…
A: Cancellation of debt: Cancellation of debt is defined as the situation in which the creditor…
Q: Se Ri Pak, age 23, recently graduated with her bachelor's degree in library and information…
A: Personal Financial Planning: Personal Finance Planning helps an individual to save and plan for…
Q: Ridge is a generous individual. During the year, she made interest-free loans to various family…
A: Imputed interest is the interest that is estimated to be collected by the lender, regardless of what…
Q: amortized over the next three years with a disposable value of $1000. Davidson's dad has agreed to…
A: The accounting equation shows the relationship between the assets, liabilities, and shareholder's…
Q: Rebecca has a loan with 1st Town bank for $5,000. She lost her job several months ago and defaulted…
A: The question is related to taxation. Forgiveness of debt is taxable.
Q: Laurel contributed equipment worth $225,000, purchased 6 months ago for $247,000 cash and used in…
A: Limited-liability Corporation (LLC): The form of business entity which is unincorporated, but…
Q: Liam Hernandez paid 112,000 for a single family home on July 1, 2021 and immediately placed it in…
A: Depreciation refers to the reduction in the value of an asset due to tear, obsolescence, market…
Q: Sandy and John Ferguson got married eight years ago and have a seven-year-old daughter, Samantha. In…
A: When the total taxable income is after computing the AGI and deducting all the deductions allowed to…
Q: Laurel contributed equipment worth $120,000, purchased 9 months ago for $136,500 cash and used in…
A: Limited-liability Corporation (LLC): The form of business entity which is unincorporated, but…
Q: Michele owns and operates her own business as a sole proprietorship. During the current year, she…
A: A tax deduction is the entire amount that a person can use to lower their tax obligation. It is a…
Q: Alisha, who is single, owns a sole proprietorship in which she works as a management consultant. She…
A: (A) Purchased at Year 1 for $400,000 (B) Depreciation allowance for 3 years: $10000 x 3 = $30000 (C)…
Q: Matthew Kennedy of Urbana, Ohio, is single and has been working as an admissions counselor at a…
A: Step 1:Determining Matthew's Life Insurance Needs:A. Needs Analysis:Final Expense Needs:This…
Q: Alex bought a used motorcycle from Sheldon's dealership for $28,000 to be paid in installments over…
A: Ans. Alex can try to find Sheldon and get his money from him, but he must pay SNL
Q: Laurel contributed equipment worth $225,000, purchased 6 months ago for $247,000 cash and used in…
A: In the given situation, Laurel contributed equipment worth $225,000, purchased 6 months ago for…
Q: In November 2021, Kortney (who is a self-employed management consultant) travels from Chicago to…
A: Deduction means reducing the taxable income by a specific amount that is allowed under the income…
Q: a. What is the total amount of for AGI deductions relating to the condo that Alexa may deduct in the…
A: Adjusted Gross Income(AGI) represents an individual's total gross income from all sources, minus…
Q: a. What is the Fergusons' 2022 federal income taxes payable or refund, including any self-employment…
A: Here, the question is regarding the Fergusons' 2022 federal income tax payable or refund, including…
Q: Bruce and Amanda are married during the tax year. Bruce is a botanist at Green Corporation. Bruce…
A: As per the Honor code of Bartleby we are bound to give the answer of first three sub parts only,…
Q: What is Julie's adjusted gross income for 2020?
A: "Hey, since there are multiple questions posted, we will answer the first question. If you want any…
Q: Angela Bower’s husband passed away last year. In 2020, Angela lives in a house with her son Jonathan…
A: Angela is single man whose husband has spent away has subordinate youngster government Tax rules…
Q: Larissa, who is age 45, has just resigned from her current job. She worked for Ace, which sponsors a…
A: Given in the question:Cash Balance = $50,000401(k) Plan = $20,000Matching Contribution by employer =…
Q: Starting on July 1, 2000, Peter borrows $7,600.00$7,600.00 each year for 4 years from his dear Aunt…
A: Interest is the amount which is charged on the loan amount on the outstanding balance. Given in the…
Q: Donald was killed in an accident while he was on the job. Darlene, Donald's wife, received several…
A: Answer :
Q: . Should the defense be sustained? Why?
A: Capacity to contract refers to the ability of a person or group of persons to enter into an…
Q: Laurel contributed equipment worth $200,000, purchased 10 months ago for $250,000 cash and used in…
A: Tax: Tax is a financial charge imposed by the county's government on the income of the person, and…
Q: Dominique Fouque owns and operates Dominique’s Doll House. She has a small shop in which she sells…
A: Hi student Since there are multiple subparts, we will answer only first three subparts. If you want…
Q: Sandy and John Ferguson got married eight years ago and have a seven-year-old daughter, Samantha. In…
A: Step 1: IncomeCombine Sandy's salary, John's salary, Web design revenue, and qualified…
Q: in bankruptcy for several more years. What are the 2014 tax consequences to Rebecca from the loan?…
A: Given in the question: Rebecca is the owner of the bar but her interest is only 20% for which she…
Q: Janice Morgan, age 24, is single and has no dependents. Janice works as an employee from Worldwide…
A: Income tax: Tax return is a form for filing the income tax return with a tax authority. The tax…
Q: Alexa owns a condominium near Cocoa Beach in Florida. In 2021, she incurs the following expenses in…
A: AGI is adjusted gross income of the business and by deducting specific deductions from AGI, taxable…
Q: Sandy and John Ferguson got married eight years ago and have a seven-year-old daughter, Samantha. In…
A: Based on your income, deductions, and credits, you determine your overall tax burden for the year…
Q: Use the information below for this page of questions. Julie is single with no dependent. She…
A: Gross income is calculated by including income and making deduction from income that allowed in the…
Q: Karyn loaned $32,000 to her co-worker to begin a new business several years ago. If her co worker…
A: Bankruptcy is a legal procedure in which a person or company announces that they are unable to repay…
Q: During 2016, Becky loans her brother Ken $5,000, which he intends to use to establish a small…
A: A bad debt deduction is allowed for that amount of bad debt which has become irrecoverable in the…
Q: Trevorson Electronics is a small company privately owned by Jon Trevorson, an electrician…
A: Direct write-off method of account receivables: A method for recognizing bad debts expense arising…
Q: Diana and Ryan Workman were married on January 1 of last year. Ryan has an eight-year-old son,…
A: Workmans Gross Income computed as follows Description Amount ($)…
Q: Melanie is employed full-time as an accountant for a national hardware chain. She also has recently…
A: Home office deduction A home office is a space set aside in a person's residence for professional…
Q: Noah and Olivia Anderson are a married couple in their early 20s living in Dallas. Noah Anderson…
A: Taxable income is the measurement of income which is used to calculate the amount of tax that needs…
Q: Cynthia is an electrician, age 29, and single. • Cynthia has investment income and has a…
A: SOLUTION SHORT TERM CAPITAL GAIN IS A PROFIT REALIZED FROM SALE ,TRANSFER OR OTHER DISPOSITION OF…
Q: Lee is 30 years old and single. Lee paid all the costs of maintaining his household for the entire…
A: Filing status is a categorization used in the U.S. tax system to determine how individuals or…
Q: Sandy and John Ferguson got married eight years ago and have a seven-year-old daughter, Samantha. In…
A: Here, the question is regarding the Fergusons' 2022 federal income tax payable or refund, including…
Q: Florence is employed by Sparkling Drinks Limited and earns a salary of $40,000 per month. Her…
A: Part 1: AnswerThe balance of tax due from Florence to the Inland Revenue Department for the Year of…
Heather owns all of the shares of Thompson Consulting Ltd (TCL), an IT consulting firm with 10 employees. TCL has a December 31 st year-end. Heather delegates all of her oversight tasks to various managers because she is busy at home raising her family. On July 25, 2011, Heather borrowed $100,000 from TCL for the purchase of a new home on a non-interest bearing basis. A loan agreement is in place that requires her to repay the full amount in five years. She has never reported anything on her personal income tax return from the loan. Assuming that you are preparing Heather's personal tax return for the first time, which of the following statements is correct?
A). There are no income tax consequences because the funds were borrowed for the purchase of a home and there is a bona fide arrangement to repay the loan.
B). Heather will have a deemed interest benefit in 2011,2012 and 2013.
C). Heather will have an income inclusion of $100,000 in 2013 and a deemed interest benefit in 2011, 2012 and 2013.
D). Heather will have an income inclusion of $100,000 in 2011 and no deemed interest benefit.
Step by step
Solved in 2 steps
- Bruce and Amanda are married during the tax year. Bruce is a botanist at Green Corporation. Bruce earns a salary of $56,000 per year. Green Corporation has an accountable reimbursement plan. During the year, Bruce has $5,000 of employee expenses. Green Corporation reimburses Bruce for only $4,000 of expenses. Bruce decides to put $5,500 into a Traditional IRA. Amanda owns a financial consulting firm as a sole proprietor (it qualifies as a full trade or business). Amanda generates $80,000 of revenues during the year. She has the following business payments associated with her firm: Utilities: $2,000 Office Rent: $14,000 Self-Employment Tax: $5,000 Salary for her secretary: $20,000 Fines/Penalties: $8,000 Payroll Taxes (Employer Portion): $1,000 Business Meals: $2,000 Bribe to police officer to forgive parking violation $1,500 Due to the income and expenses above, Amanda has $39,500 of Qualified Business Income for the purposes of the QBI deduction. Also, during the year a tornado…Reba Dixon is a fifth-grade school teacher who earned a salary of $38,000 in 2022. 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 $2,250 to move their personal belongings, and she and Heather spent two days driving the 1,600 miles to Georgia. Reba rented a home in…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…
- Leon 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. $10,200Samantha, who is single and has MAGI of $41,400, was recently employed by an accounting firm. During the year, she spends $1,200 for a CPA exam review course and begins working on a law degree in night school. Her law school expenses were $4,140 for tuition and $720 for books (which are not a requirement for enrollment in the course). Click here to access Concept Summary 9.2. If an amount is zero, enter "0". Assuming no reimbursement, how much of these expenses can Samantha deduct?Lilly works for ACME Inc. in Memphis, Tennessee. She is single and owns her own home. ACME promoted Lilly to a new position that required her to move to Seattle, Washington in July 2022. She decided to rent out her Tennessee residence and found a tenant that took possession on August 1, 2022. The property was rented out at fair rental value. Lily’s total mortgage interest for the entire tax year is $3,000 and property taxes were $900. How much of Lilly’s mortgage interest and property taxes should be reported on her Schedule E?
- Wally is employed as an executive with Pay More Incorporated. To entice Wally to work for Pay More, the corporation loaned him $20,000 at the beginning of the year at a simple interest rate of 1 percent. Wally would have paid interest of $2,400 this year if the interest rate on the loan had been set at the prevailing federal interest rate. Required: Wally used the funds as a down payment on a speedboat and repaid the $20,000 loan (including $200 of interest) at year-end. a-1. Does this loan result in any income to either party? a-2. Indicate the amount below. Assume instead that Pay More forgave the loan and interest on December 31. What amount of gross income does Wally recognize this year?18. Peggy is an executive for the Tan Furniture Manufacturing Company. She purchased furniture from the company for $9,500, the price Tan ordinarily would charge a wholesaler for the same items. The retail price of the furniture was $12,500, and Tan's cost was $9,000. The company also paid for Peggy's parking space in a garage near the office. The parking fee was $600 for the year. All employees are allowed to buy furniture at a discounted price comparable to that charged to Peggy. However, the company does not pay other employees' parking fees. Peggy's gross income from the above is: a. $0. b. $600. c. $3,500. d. $4,100. e. None of a-d is correctBetty operates a beauty salon as a sole proprietorship. Betty also owns and rents an apartment building. This year Betty had the following income and expenses. You may assume that Betty will owe $2,502 in self-employment tax on her salon income, with $1,251 representing the employer portion of the self-employment tax. You may also assume that her divorce from Rocky was finalized in 2016. Interest income $ 11,255 Salon sales and revenue 86,360 Salaries paid to beauticians 45,250 Beauty salon supplies 23,400 Alimony paid to her ex-husband, Rocky 6,000 Rental revenue from apartment building 31,220 Depreciation on apartment building 12,900 Real estate taxes paid on apartment building 11,100 Real estate taxes paid on personal residence 6,241 Contributions to charity 4,237 b-1. Complete Schedule 1 of Form 1040 for Betty.
- Tony and Lyly are married during the tax year. Tony is a botanist at Red Corporation. Tony earns a salary of $70,000 per year. Lyly owns an accounting practice as a sole proprietor (it qualifies as a full trade or business). Lyly generates $100,000 of revenues during the year. She has the following business payments associated with her firm: Utilities: $2,000 Office Rent: $15,000 Office Supplies: $1,700 Self-employed health insurance premiums: $5,000 Self-Employment Tax (hers): $10,000 Salary for her secretary: $25,000 Fines/Penalties: $2,500 State Income Tax (from business): $6,000 Payroll Taxes (secretary’s): $2,000 Meals: $1,200 (100% for 2021) Payment to officer to let her go from speeding while on her way to a client meeting $100 Lyly also contributed $6,000 into her Traditional IRA. They also have the following personal expenses during the year: Medical Expenses: $17,500 State & Local Taxes (personal): $11,000 Federal Income Tax Payments (personal): $7,000 Cash…Jan owns her own service business and also owns some blue-chip stock. She is starting to retire and she wants her son, Matt, to take over the business and also generally be in charge of looking after Jan. In X1, Matt began working for the business and Jan paid Matt a salary. She also signed over 25% of her own earnings to Matt. On July 1, X1, Jan gifted the blue-chip stock to Matt. On September 15, X1 the stock paid dividends. On her X1 tax return, Jan reported 75% of the earnings from her service business and none of the dividends (taking the position that these items were income to Matt). The IRS is auditing the return and assert that all of the business earnings and all of the dividends should have been reported by Jan. Required: Discuss a) the business earnings, and b) the dividends. Is the IRS correct? Why or why not? What information is needed to make the decision? Provide a couple of scenarios. Jan owns her own service business and also owns some blue-chip stock. She is starting…Donald was killed in an accident while he was on the job. Darlene, Donald's wife, received several payments as a result of Donald's death. Review the payments below and then enter the amount to be included in Darlene's gross income in the table provided. Donald's employer paid Darlene an amount equal to Donald's three months' salary ($45,600), which is what the employer does for all widows and widowers of deceased employees. Donald had $28,400 in accrued salary that was paid to Darlene. Donald's employer had provided Donald with group term life insurance of $165,000, which was payable to his widow in a lump sum. Premiums on this policy totaling $23,600 had been included in Donald's gross income under § 79. Donald had purchased a life insurance policy (premiums totaled $196,000) that paid $358,000 in the event of accidental death. The proceeds were payable to Darlene, who elected to receive installment payments as an annuity of $32,500 each year for a 21-year period. She received her…