which of the following statements is correct?
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: To support herself while attending school, Daun Deloch sold stereo systems to other students. During…
A: Estimated Warranty claims = 4% of sales Sales = $ 312000 Estimated Warranty claims = 4% of 312000…
Q: Dr Greg Marshall acquired a house in Windsor under a contract dated 1 January 2011 for $560,000. He…
A:
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: 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: To support herself while attending school, Daun Deloch sold stereo systems to other students. During…
A: Income statement is a financial statement which shows all income and all expenses of the business…
Q: Donald was killed in an accident while he was on the job. Darlene, Donald's wife, received several…
A: Tax refers to the amount charged by the government on the income earned by the individual and…
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: 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: Amy rented her apartment to Ben for $5,000 per month in January 2015. However, they both agreed to…
A: Ben pays a rent of 5,000 but entered into the agreement of $10,000 rent to claim deduction.
Q: Donald was killed in an accident while he was on the job. Darlene, Donald's wife, received several…
A: Income tax:The income tax refers to the amount that is paid by the taxpayer to the tax authority of…
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: Amir, who is single, retired from his job this year. He received a salary of $25,000 for the portion…
A: Salary$25,000Dividend$2,700Pension Income (Taxable Portion) ($1,000 x 4 x 60%)$2,400Social Security…
Q: Lloyd is a divorce attorney who practices law in Florida. He wants to join the American Divorce…
A: The objective of this question is to find out the minimum number of years that Lloyd must remain a…
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: Amir who is single, retired from his job this year. He received a salary of $25,000 for the portion…
A: Adjusted gross income (AGI) is your gross income minus certain adjustments. The IRS uses the AGI to…
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: Determine Ms. Well's maximum moving expense deduction for 2021, as well as any carry forward that is…
A: The moving expense deduction is a tax deduction that allows taxpayers to deduct certain expenses…
Q: Andile, 77 years of age, is a Senior Manager at Blue V, a small-medium sized manufacturing company…
A: To calculate Andile's taxable income for the year ended 29 February 2024, we need to consider his…
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: QOn February 15th, Jody had $17,000 in her RRSP. On that same day, she made a contribution of…
A: The Home Buyers' Plan (HBP) is a program in Canada that allows individuals to withdraw up to from…
Q: O Townhouse and rental income are Sam's separate property; condo becomes community property
A: Community property consists of assets that come into the marriage as a gift or inheritance. These…
Q: Reba Dixon is a fifth-grade school teacher who earned a salary of $38,000 in 2022. She is 45 years…
A: The term "taxation" refers to the process through which a taxing authority, typically a government,…
Q: Ginny owns a house in northern Wisconsin that she rents for $1,600 per month. Ginny does not use the…
A: The objective of the question is to determine the amounts that Ginny should include for rental…
Q: George, an individual, is an architect and general contractor. Gracie is a wealthy individual.…
A: Cost Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…
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: June uses her personal car for work as an employee. For the year, June drove 5,000 business miles…
A: In the actual method expenses related to the business use of a car are expensed based on the…
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: To support herself while attending school, Daun Deloch sold stereo systems to other students. During…
A: Income Statement An income statement is a financial statement showing a…
Q: John owns a convenience shop called City Conv. The following events occurred for John during…
A: The expenses which are incurred according to the laws and rules are allowed as deduction while…
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: During 2016, Becky loans her brother Ken $5,000, which he intends to use to establish a small…
A: A bad debt deduction is allowed for that amount of bad debt which has become irrecoverable in the…
Q: Amanda is a self-employed newspaper columnist who does her work exclusively from a home office.…
A: Taxation-Taxation means imposing a tax on individuals and different types of organizations. Which…
Q: Tyrell has a tax service and accounting business in Redwood City. He decides to move to Center City,…
A: A breach of contract is a violation of any of the agreed-upon terms and conditions of a binding…
Q: a is an IT consultant. Three
A: An insurance policy is a contract between an individual or entity (the policyholder) and an…
Q: Diana and Ryan Workman were married on January 1 of last year. Ryan has an eight-year-old son,…
A: Workmans Gross Income computed as follows Description Amount ($)…
Q: Lloyd is a divorce attorney who practices law in Florida. He wants to join the American Divorce…
A: Future value refers to the future worth of a present sum at a certain future date. The concept of…
Q: To support herself while attending school, Daun Deloch sold stereo systems to other students. During…
A: Income Statement An income statement is a financial statement showing a…
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…
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
- Donald Jefferson and his wife, Maryanne, live in a modest house located in a Los Angeles suburb. Donald has a job at Pittsford Cast Iron that pays him $50,000 annually. In addition, he and Maryanne receive $2,500 interest from bonds that they purchased 10 years ago. To supplement his annual income, Donald bought rental property a few years ago. Every month he collects $3,500 in rent from all of the property he owns. Maryanne manages the rental property, and she is paid $15,000 annually for her work. During 2015, Donald had to have the plumbing fixed in the houses that he rents as well as the house in which he and Maryanne live. The plumbing bill was $1,250 for the rented houses and $550 for the Jeffersons’ personal residence. In 2015, Donald paid $18,000 for mortgage interest and property taxes—$12,650 was for the rental houses, and the remaining $5,350 was for the house occupied by him and his wife. The couple has three children who have graduated from medical school and now are…Lloyd is a divorce attorney who practices law in Florida. He wants to join the American Divorce Lawyers Association (ADLA), a professional organization for divorce attorneys. The membership dues for the ADLA are $650 per year and must be paid at the beginning of each year. For instance, membership dues for the first year are paid today, and dues for the second year are payable one year from today. However, the ADLA also has an option for members to buy a lifetime membership today for $7,000 and never have to pay annual membership dues.Obviously, the lifetime membership isn’t a good deal if you only remain a member for a couple of years, but if you remain a member for 40 years, it’s a great deal. Suppose that the appropriate annual interest rate is 5.9%. What is the minimum number of years that Lloyd must remain a member of the ADLA so that the lifetime membership is cheaper (on a present value basis) than paying $650 in annual membership dues? (Note: Round your answer up to the nearest…Lee is 30 years old and single. Lee paid all the costs of maintaining his household for the entire year. Determine Lee’s filing status in each of the following alternative situations: c. Lee is Ashton's uncle. Ashton is 22 years old and was a full-time student from January through April. Ashton's gross income was $5,000. Ashton lived in Lee's home from April 1 through the end of the year.
- Andrew, who is single, retired from his job this year. He received a salary of $26,000 for the portion of the year that he worked, tax-exempt interest of $2,600, and dividends from domestic corporations of $3,700. On October 1, he began receiving monthly pension payments of $700 and Social Security payments of $500. Assume an exclusion ratio of 40% for the pension. Andrew owns a duplex that he rents to others. He received rent of $11,000 and incurred $16,000 of expenses related to the duplex. He continued to actively manage the property after he retired from his job. Requirement Compute Andrew's adjusted gross income. Salary Dividend income 26,000 3,700 Rental income 11,000 Social security income (taxable portion) ? Pension income (taxable portion) Gross income Minus: Deductions for Adjusted gross income Rental income Adjusted gross income -16,000Florence 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 2013Reba 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…
- 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 $1,500Due to the income and expenses above, Amanda has $39,500 of Qualified Business Income. Also, during the year a tornado damaged the roof of their personal…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…
- 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. $10,200Kate is an executive for the Cozy Furniture Manufacturing Company. She purchased furniture from the company for $9,500, the price Cozy ordinarily would charge a wholesaler for the same items. The retail price of the furniture was $12,500, and Cozy’s cost was $9,000. The company also paid for Kate’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 Kate. However, the company does not pay other employees’ parking fees. Kate’s gross income from the above is: answer choices: $3,500. $4,100. $-0-. $900 $600.Jane Doe moved from Victoria to Vancouver for an internal transfer requested by her employer on October 1, 2020. Prior to relocation, she spent $1000 on a house hunting trip to Vancouver and ended up signing a one-year lease for an apartment in Vancouver after an unsuccessful bid for a house. The cost of sales of her old residence in Victoria, including legal fees and brokerage fees, totaled $7,200. The actual moving costs were $13,000. Jane’s employer agreed to pay $8,000 for her moving costs. Jane’s salary for 2020 was $48,000 (assume her monthly salary is the same throughout the year). Required: Calculate Jane’s maximum moving expense deduction for 2020. Please also indicate the carry forward amount, if any.