Principles Of Taxation For Business And Investment Planning 2020 Edition
23rd Edition
ISBN: 9781259969546
Author: Sally Jones, Shelley C. Rhoades-Catanach, Sandra R Callaghan
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 1, Problem 3IRP
Bailey Company, which has offices in six states, owns an airplane that company executives use to travel from office to office. When the plane is not in use, it is stored in a hangar located in a jurisdiction that doesn’t levy a personal property tax on business tangibles. When the plane is in use, it is stored on a temporary basis in hangars located in jurisdictions that tax business tangibles.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Joe operates a business that locates and purchases specialized assets for clients, among other activities. Joe uses the accrual method of accounting, but he doesn't keep any significant inventories of the specialized assets that he sells. Joe reported the following financial information for his business activities during this year.
Determine the effect of each of the following transactions on the taxable business income.
Required:
Joe has signed a contract to sell gadgets to the city. The contract provides that sales of gadgets are dependent upon a test sample of gadgets operating successfully. In December of this year, Joe delivers $12,000 worth of gadgets to the city that will be tested in March of next year. Joe purchased the gadgets especially for this contract and paid $8,500.
Joe paid $180 in July of this year to entertain a visiting out-of-town client. The client didn't discuss business with Joe during this visit, but Joe wants to maintain good relations to encourage additional…
Joe operates a business that locates and purchases specialized assets for clients, among other activities. Joe uses the accrual method of accounting, but he doesn’t keep any significant inventories of the specialized assets that he sells. Joe reported the following financial information for his business activities during this year.Determine the effect of each of the following transactions on the taxable business income.
Required:
a. Joe has signed a contract to sell gadgets to the city. The contract provides that sales of gadgets are dependent upon a test sample of gadgets operating successfully. In December of this year, Joe delivers $12,000 worth of gadgets to the city that will be tested in March of next year. Joe purchased the gadgets especially for this contract and paid $8,500.
b. Joe paid $180 in July of this year to entertain a visiting out-of-town client. The client didn’t discuss business with Joe during this visit, but Joe wants to maintain good relations to encourage…
Irwin is a resident of Wyoming. He sold real estate located in North Carolina to Bethany, LLC, an Ohio-based company. Bethany failed to make payments on the loan. Which state's laws determine the foreclosure process for the property?
(a) Ohio
(b) North Carolina
(c) Wyoming
(d) No state, because the foreclosure process is controlled by federal law.
Chapter 1 Solutions
Principles Of Taxation For Business And Investment Planning 2020 Edition
Ch. 1 - Prob. 1QPDCh. 1 - Prob. 2QPDCh. 1 - Prob. 3QPDCh. 1 - Prob. 4QPDCh. 1 - Prob. 5QPDCh. 1 - A local government imposed a new 2 percent tax on...Ch. 1 - Prob. 7QPDCh. 1 - Prob. 8QPDCh. 1 - Prob. 9QPDCh. 1 - Prob. 10QPD
Ch. 1 - Prob. 11QPDCh. 1 - Prob. 12QPDCh. 1 - Prob. 13QPDCh. 1 - Prob. 14QPDCh. 1 - One way for the federal government to increase tax...Ch. 1 - The Internal Revenue Code and Treasury regulations...Ch. 1 - Mr. Josh Kenney, a U.S. citizen and resident of...Ch. 1 - Prob. 2APCh. 1 - Prob. 3APCh. 1 - This year, State A raised revenues by increasing...Ch. 1 - Prob. 5APCh. 1 - Prob. 6APCh. 1 - Prob. 7APCh. 1 - Prob. 8APCh. 1 - Prob. 9APCh. 1 - Mrs. Doyle, a resident of Rhode Island, traveled...Ch. 1 - Prob. 11APCh. 1 - Prob. 12APCh. 1 - Mr. and Mrs. Underhill operate a hardware store in...Ch. 1 - Prob. 14APCh. 1 - Wallis Company produces circuit boards in a...Ch. 1 - Prob. 1IRPCh. 1 - Prob. 2IRPCh. 1 - Bailey Company, which has offices in six states,...Ch. 1 - Prob. 4IRPCh. 1 - Yarrow Company orders 500,000 of office furniture...Ch. 1 - Acme Corporation was formed under the laws of...Ch. 1 - Prob. 7IRPCh. 1 - Prob. 8IRPCh. 1 - Prob. 9IRPCh. 1 - Mr. Imhoff, age 72, has lived in Los Angeles his...Ch. 1 - Prob. 1TPCCh. 1 - KTR Company earns a 10 profit on each unit of...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Marvin sells computer equipment and is objecting to an assessment received from SARS. During the current year of assessment (28 February), Marvin donated second-hand office equipment to a local radio station. In return, the radio station agreed to broadcast 'specials' that Marvin had on certain computer products for the week. SARS taxed the value of the office equipment donated to the radio station and stated that the donation fell within the definition of gross income. Marvin believes otherwise. YOU ARE REQUIRED: Discuss all the gross income requirements that Marvin should bear in mind when preparing the objection of the assessment. (Assume that Marvin is a resident of the Republic.)arrow_forwardOn Thursday, Justin flies from Baltimore (where his sole proprietorship office is located) to Cadiz (Spain). He conducts business on Friday and Tuesday; vacations on Saturday, Sunday, and Monday (a legal holiday in Spain); and returns to Baltimore on Thursday. Justin was scheduled to return home on Wednesday, but all flights were canceled due to bad weather. As a result, he spent Wednesday watching floor shows at a local casino. a. For tax purposes, what portion of Justins trip is regarded as being for business? b. Suppose Monday was not a legal holiday. Would this change your answer to part (a)? Explain. c. Under either part (a) or (b), how much of Justins airfare qualifies as a deductible business expense?arrow_forwardA municipal council passed an ordinance imposing an occupation tax on the occupation of an “installment manager”. Ben is the only salaried person with such occupation in the municipality. Can he successfully challenge the validity of the ordinance since he is the only one adversely affected?arrow_forward
- Juan is the owner of a "kalesa". He charges fees to customers who would want to ride on his "kalesa" and take a tour around the area. What is the tax implication of this to Juan? A. Operating the "kalesa" is subject to percentage tax on business. B. Operating the "Kalesa" is subject to VAT if the gross annual receipts exceed P3M. C. The transaction is exempt from business tax.arrow_forwardMs. T. Potts, the treasurer of Ideal China, has a problem. The company has just ordered a new kiln for $464,000. Of this sum, $58,000 is described by the supplier as an installation cost. Ms. Potts does not know whether the Internal Revenue Service (IRS) will permit the company to treat this cost as a tax-deductible current expense or as a capital investment. In the latter case, the company could depreciate the $58,000 straight-line over 5 years. The tax rate is 30% and the opportunity cost of capital is 5%. a. What is the present value of the cost of the kiln if the installation cost is treated as a separate current expense?b. What is the present value of the cost of the kiln if the installation cost is treated as a part of the capital investment?arrow_forwardYou are the accountant for the Millenium Corporation. Last year the company purchased a $2,500,000 corporate jet to be used for executive travel. To help offset the cost of the airplane, your company occasionally rents the jet to the executives of two other corporations when it is not in use by Millenium.When the corporate tax return was filed this year, you began depreciating the jet by using MACRS. Today you received a letter from the IRS informing you that because your company occasionally rents the airplane to others, it is considered a commercial aircraft and must be depreciated as such. The corporate lawyers are considering disputing this IRS ruling and have asked you the following questions: How much depreciation did you claim this year? 2,500,000x.20= $500,000 claimed in depreciation this year Under the new category, how much depreciation would be claimed? 2,500,000x.1429= $357,250 claimed in depreciation in the new category If the company pays 30% income tax, what…arrow_forward
- Ms. T. Potts, the treasurer of Ideal China, has a problem. The company has just ordered a new kiln for $496,000. Of this sum, $62,000 is described by the supplier as an installation cost. Ms. Potts does not know whether the Internal Revenue Service (IRS) will permit the company to treat this cost as a tax-deductible current expense or as a capital investment. In the latter case, the company could depreciate the $62,000 straight-line over 5 years. The tax rate is 30% and the opportunity cost of capital is 5%. a. What is the present value of the cost of the kiln if the installation cost is treated as a separate current expense?b. What is the present value of the cost of the kiln if the installation cost is treated as a part of the capital investment? (Round your answer to the nearest whole dollar amount.)arrow_forwardWhich of the following corporations would not be considered resident in Canada for tax purposes?1)Axem Inc. was incorporated in Manitoba on April 5, 1965 and has carried on business in Canada sincethat date. 2)Linco Ltd. was incorporated in Ontario on April 4, 1985 and, until the end of 1999,all of the operations and board of directors meetings were held in the southern United States. In 2000,all of the management and operations of the Company moved to Toronto. 3)Norad Inc. was incorporated in New York state on March 1, 1985 and, until the end of 1993, carried on business in Canada. At that time, all of the management and operations of the Company moved to the southern United States. 4)Rio Amgal Inc. was incorporated in Manitoba on September 3, 2010. While the Company hasoperations in both Canada and the U.S., the directors live in Calgary. As a consequence, all director’smeetings are held in that city. 5)In all cases the corporations would be considered residents of Canada.arrow_forwardMs. T. Potts, the treasurer of Ideal China, has a problem. The company has just ordered a new kiln for $416,000. Of this sum, $52,000 is described by the supplier as an installation cost. Ms. Potts does not know whether the Internal Revenue Service (IRS) will permit the company to treat this cost as a tax-deductible current expense or as a capital investment. In the latter case, the company could depreciate the $52,000 straight-line over 5 years. The tax rate is 30% and the opportunity cost of capital is 5%. a. What is the present value of the cost of the kiln if the installation cost is treated as a separate current expense? b. What is the present value of the cost of the kiln if the installation cost is treated as a part of the capital investment? (Round your answer to the nearest whole dollar amount.) a. Present value b. Present valuearrow_forward
- Mr. Chuang set up a company called Good Home Limited. The company holds several properties in Hong Kong and lease out to earn rental income. Mr. Chuang wonders whether the company should pay property tax or profits tax. He also concerns if double taxation of the same income derived from a property under property tax and profits tax will charge to Good Home Limited and how it can avoid this if so. Advise Mr. Chuangarrow_forwardMs. T. Potts, the treasurer of Ideal China, has a problem. The company has just ordered a new kiln for $704,000. Of this sum, $88,000 is described by the supplier as an installation cost. Ms. Potts does not know whether the Internal Revenue Service (IRS) will permit the company to treat this cost as a tax-deductible current expense or as a capital investment. In the latter case, the company could depreciate the $88,000 straight-line over 5 years. The tax rate is 30% and the opportunity cost of capital is 5%. a. What is the present value of the cost of the kiln if the installation cost is treated as a separate current expense? b. What is the present value of the cost of the kiln if the installation cost is treated as a part of the capital investment? Give typing answer with explanation and conclusionarrow_forwardFirst Metro Pacific was able to persuade Francis to join the company as its Assistant Vice President for Finance which included a car plan worth P3,000,000 in its compensation The company purchased the vehicle and registered the same in favor of Francis. Assuming further that Francis is a non-resident alien not engaged in trade or business, how much is the fringe benefits tax?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT
Individual Income Taxes
Accounting
ISBN:9780357109731
Author:Hoffman
Publisher:CENGAGE LEARNING - CONSIGNMENT
How to (Legally) Never Pay Taxes Again; Author: Next Level Life;https://www.youtube.com/watch?v=q63F1pBrUHA;License: Standard Youtube License