Income Tax Fundamentals 2020
38th Edition
ISBN: 9780357391129
Author: WHITTENBURG
Publisher: Cengage
expand_more
expand_more
format_list_bulleted
Question
Chapter 12, Problem 14MCQ
To determine
Introduction: The Internal Revenue Service (IRS) has a wide range of functions and responsibilities such as look after of administration of federal taxes, and to perform duties like estimating, determining, and collecting taxes in the form of revenue to the government, it also performs tax return audits and imposes penal provisions. It is the office within the revenue department. The task of the department is to provide the taxpayers with quality service by assisting them in proving knowledge content so the taxpayers understand their tax responsibility and pay taxes timely. It is important in maintaining and establishing tax laws.
To choose: The burden of proof lies with the taxpayers with a net worth exceeding.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
A taxpayer has the following income (losses) for the current year:
Active Income
Portfolio Income
Passive Income (Loss)
$18,000
$31,000
$(35,000)
What is the taxpayer's taxable income (loss) if ...
a.
The taxpayer is a publicly held corporation?
$fill in the blank 1
b.
The taxpayer is a closely held corporation?
$fill in the blank 2
c.
The taxpayer is a single individual and the passive income is not from a rental activity?
$fill in the blank 3
d.
The taxpayer is a single individual and the passive income is the result of a rental activity for which the taxpayer is a qualified real estate professional?
$fill in the blank 4
e.
The taxpayer is a single individual and the passive income is the result of a rental activity for which the taxpayer fails to qualify as a real estate professional but does meet the active participation test?
$fill in the blank 5
If the value of its total assets do no exceed P100,000,000, compute for the income tax payable if the taxpayer is a domestic corporation.
1. Jay transfers land worth $10,000 to a corporation for all the shares. Jay's adjusted basis in the land was $3,000. Jay's gain realized is and Jay's gain recognized is .
2. What are the requirements for a taxpayer to be able to defer gain on the transfer of assets to a corporation in exchange for stock? (Give all 5 requirements)
3. What or who is treated as a person for tax purposes? Answer in alphabetical order:
4. Sara performs services for a corporation and receives stock worth $20,000 which represents 20% of the stock. Henry transfers land worth $80,000 with a basis of $15,000 for 80% of the stock. Did Sara transfer property to the corporation?
a. What is Sara's basis in the land?
b What is Sara's holding period in the stock?
5. H transfers land to a corporation Z in exchange for stock. With respect to the stock:
a) Who is the transferor
b) Who is the transferee
Chapter 12 Solutions
Income Tax Fundamentals 2020
Ch. 12 - Which of the following is a responsibility of a...Ch. 12 - Prob. 2MCQCh. 12 - Prob. 3MCQCh. 12 - Prob. 4MCQCh. 12 - Prob. 5MCQCh. 12 - Prob. 6MCQCh. 12 - Prob. 7MCQCh. 12 - Prob. 8MCQCh. 12 - Prob. 9MCQCh. 12 - Prob. 10MCQ
Ch. 12 - Prob. 11MCQCh. 12 - Prob. 12MCQCh. 12 - Which of the following have privileged...Ch. 12 - Prob. 14MCQCh. 12 - Prob. 15MCQCh. 12 - Prob. 16MCQCh. 12 - Prob. 17MCQCh. 12 - Taxpayers have the right to have an IRS...Ch. 12 - If a U.S. Tax Court agrees with the taxpayer on...Ch. 12 - If the IRS owes a taxpayer a refund, the law...Ch. 12 - Prob. 21MCQCh. 12 - Melodie's taxable income is $39,000 and she pays...Ch. 12 - Jim has a house payment of $2,000 per month of...Ch. 12 - Indicate which of the following statements are...Ch. 12 - Prob. 2PCh. 12 - Prob. 3PCh. 12 - In the 2019 tax year, Michelle paid the following...Ch. 12 - Prob. 5PCh. 12 - Prob. 6PCh. 12 - Prob. 7PCh. 12 - Prob. 8PCh. 12 - Prob. 9PCh. 12 - Prob. 10PCh. 12 - Prob. 11PCh. 12 - Prob. 12P
Knowledge Booster
Similar questions
- LO.3 Taupe, a calendar year taxpayer, has a long-term capital loss of 4,000 and a short-term capital loss of 4,000. How are these items handled for tax purposes if Taupe is: a. An individual? b. A C corporation?arrow_forwardA corporate taxpayer has the following financial items: Questions: 1. How much is the deductible interest expense? 2. How much is the deductible charitable contributions?arrow_forwardIf a taxpayer chooses to have his dividends automatically reinvested in the corporation's stock, they are not reported on the tax return nor taxed because he did not receive the money. Choose one a. True answer. b. False Which of the following items is generally not taxable on a Federal return? Choose one a. Income from illegal activity answer. b. Inheritance c. Fees received for jury duty d. Tips under $20 a month e. None of thesearrow_forward
- The taxpayer is a domestic corporation and the tax period is 2021. Compute for the exempt income provided the following in the photo: A. 550,000 B. 6,500,000 C. 9,250,000 D. 15,750,000arrow_forwardWho is eligible to take the Section 199A qualified business income deduction? 1. C corporation on Form 1120 II. S corporation on Form 1120S III. Partnership on Form 1065 IV. Sole proprietorship on Schedule C V. Individual taxpayer on Form 1040 1 I, II, III II, III, IV Varrow_forwardTrust B says the trustee may distribute income in her sole discretion. During the tax year Trust B generates $5,000 of interest income and $4,000 of long term capital gains. Assuming the trustee distributes all eligible items of income, what amount of income will C, the beneficiary, recognize on their tax return? O $5,500 O $9,000 $4,000 $0arrow_forward
- For an accrual basis taxpayer, the all events test is not met until economic performance occurs. Economic performance occurs: (a.) When a corporation receives its completed tax return from its accountant (b.) When the employees of self-insured corporation receive medical treatment (c.) When a corporation purchases a $5 million annuity in settlement of $20 million award to a plaintiff/customer in a production liability lawsuit (d.) On March 1, when a corporation uses a leased copy machine to make 12,000 copies for the month of March and it must pay $.10 per copy for copies mad in excess 10,000 plus a flat fee of $500/month.arrow_forward0 Required information [The following information applies to the questions displayed below] This year, Justin B's share of S corporation income includes $5,000 of interest income, $6,500 of dividend income, and $45,000 of net income from the corporation's professional service business activity. a. Assume that Justin B. materially participates in the S corporation. How much of his S corporation income is potentially subject to the net investment income tax? S-Corporation income subject to net investment income taxarrow_forwardDetermine the taxpayer's gross income for tax purposes in each of the following situations: If an amount is zero, enter "0". Gross Income a. Deb, a cash basis taxpayer, traded a corporate bond with accrued interest of $300 forcorporate stock with a fair market value of $12,000 at the time of the exchange. Deb's cost ofthe bond was $10,000. The value of the stock had decreased to $11,000 by the end of theyear. $fill in the blank 1 b. Deb needed $10,000 to make a down payment on her house. She instructed her broker to sellsome stock to raise the $10,000. Deb's cost of the stock was $3,000. Based on her broker'sadvice, instead of selling the stock, she borrowed the $10,000 using the stock as collateral forthe debt. $fill in the blank 2 c. Deb's boss gave her two tickets to the Rabid Rabbits rock concert because she met her salesquota. At the time she received the tickets, each ticket had a face price of $200 and was sellingon eBay for $300. On the…arrow_forward
- A taxpayer operates a business through a single-member LLC (disregarded for federal tax purposes). The taxpayer contributes $30,000 cash and equipment worth $50,000 (having an adjusted basis of $20,000) to the LLC to fund its operations. The LLC obtains a loan from a bank of $100,000. Because the LLC has no established credit, the taxpayer has to personally guarantee the loan. What is the taxpayer's amount at risk? O The taxpayer is at risk in the amount of $30,000. The taxpayer is at risk in the amount of $50,000. O The taxpayer is at risk in the amount of $80,000. O The taxpayer is at risk in the amount of $150,000.arrow_forwardA resident citizen has the following data in 2022:Gross receipts from services, P800,000Cost of services, P200,000Long term capital gain, P15,000Short term capital loss, P5,000Dividend from a domestic corporation, P15,000Interest income from bank deposits, P10,000Operating expenses, P20,000Assuming the taxpayer chooses optional standard deduction, how much is the taxable income? a. P500,000 b. P482,500 c. P364,500 d. P486,000arrow_forwardA resident citizen has the following data in 2022:Gross receipts from services, P800,000Cost of services, P200,000Long term capital gain, P15,000Short term capital loss, P5,000Dividend from a domestic corporation, P15,000Interest income from bank deposits, P10,000Operating expenses, P20,000Assuming the taxpayer chooses optional standard deduction, how much is the taxable income? Choices P486,000 P500,000 P364,500 P482,500arrow_forward
arrow_back_ios
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