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
Question
Chapter 16, Problem 32AP
a.
To determine
Calculate Person E’s AGI.
b.
To determine
Calculate Person E’s AGI if recognized a $20,000
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
In 2005, Mr. Earl, a single taxpayer, contributed $45,000 in exchange for 500 shares of
DB stock. In 2008, he paid $40,000 to another shareholder to purchase 1,000 more DB
shares. All DB's stock qualified as Section 1244 stock when it was issued. This year, Mr.
Earl sold all 1,500 DB shares for $16 per share. His only income item was his $80,000
salary. Assume the taxable year is 2021.
Required:
a. Compute Mr. Earl's AGI.
b. What is Mr. Earl's AGI if he also recognized a $20,000 capital gain on the sale of other
securities?
In 2000, Ms. Ennis, a head of household, contributed $45,000 in exchange for 450 shares of Seta stock. Seta is a qualified small
business. This year, Ms. Ennis sold all 450 shares for $117,000. Her only other investment income was an $8,300 long-term capital gain
from the sale of land. Her taxable income before consideration of her two capital transactions is $599,000. Assume the taxable year is
2023. Use Individual tax rate schedules and Tax rates for capital gains and qualified dividends.
Required:
a. Compute Ms. Ennis's income tax and Medicare contribution tax for the year.
b. How would the computation change if Ms. Ennis acquired the Seta stock in 2011 instead of 2000?
c. How would the computation change if Ms. Ennis acquired the Seta stock in 2020 instead of 2000?
> Answer is not complete.
Complete this question by entering your answers in the tabs below.
Required A Required B Required C
Compute Ms. Ennis's income tax and Medicare contribution tax for the year.
Note: Round your…
In 2000, Ms. Ennis, a head of household, contributed $76,000 in exchange for 760 shares of Seta stock. Seta is a
qualified small business. This year, Ms. Ennis sold all 760 shares for $138,000. Her only other investment income was an
$8,400 long-term capital gain from the sale of land. Her taxable income before consideration of her two capital
transactions is $567,000. Assume the taxable year is 2022. Use Individual tax rate schedules and Tax rates for capital
gains and qualified dividends.
Required:
a. Compute Ms. Ennis's income tax and Medicare contribution tax for the year.
b. How would the computation change if Ms. Ennis acquired the Seta stock in 2011 instead of 2000?
c. How would the computation change if Ms. Ennis acquired the Seta stock in 2019 instead of 2000?
Complete this question by entering your answers in the tabs below.
Required A Required B Required C
Compute Ms. Ennis's income tax and Medicare contribution tax for the year.
Note: Round your intermediate calculations…
Chapter 16 Solutions
Principles Of Taxation For Business And Investment Planning 2020 Edition
Ch. 16 - Contrast the income tax consequences of the yields...Ch. 16 - Prob. 2QPDCh. 16 - Mrs. Buckley, age 74, has 100,000 in a certificate...Ch. 16 - Ms. Quint sadly concluded that a 7,500 debt owed...Ch. 16 - Prob. 5QPDCh. 16 - Prob. 6QPDCh. 16 - Discuss the potential effect of the passive...Ch. 16 - Prob. 8QPDCh. 16 - Prob. 9QPDCh. 16 - Prob. 10QPD
Ch. 16 - Prob. 11QPDCh. 16 - Prob. 1APCh. 16 - Mr. and Mrs. Lays taxable income is 679,000, which...Ch. 16 - Dianne Stacy, a single taxpayer, has 272,000...Ch. 16 - Prob. 4APCh. 16 - Mrs. Nunn, who has a 24 percent marginal tax rate...Ch. 16 - Refer to the preceding problem and assume that...Ch. 16 - Mrs. Yue, a resident of Virginia, paid 50,000 for...Ch. 16 - Ms. Pay, who has a 40.8 percent marginal tax rate...Ch. 16 - Mr. Jolly received the 100,000 face amount on the...Ch. 16 - Prob. 10APCh. 16 - Prob. 11APCh. 16 - Prob. 12APCh. 16 - Prob. 13APCh. 16 - Fifteen years ago, Mr. Fairhold paid 50,000 for a...Ch. 16 - Refer to the facts in the preceding problem....Ch. 16 - Prob. 16APCh. 16 - Prob. 17APCh. 16 - Three years ago, Mrs. Gattis loaned 10,000 to Mr....Ch. 16 - Prob. 19APCh. 16 - Prob. 20APCh. 16 - Mrs. Beard recognized a 12,290 capital loss on the...Ch. 16 - Prob. 22APCh. 16 - Prob. 23APCh. 16 - Mr. and Mrs. Revel had 206,200 AGI before...Ch. 16 - Prob. 25APCh. 16 - Mr. Fox, a single taxpayer, recognized a 64,000...Ch. 16 - Mrs. Cox, a head of household, earned a 313,000...Ch. 16 - Prob. 28APCh. 16 - Prob. 29APCh. 16 - Mr. Dunn, who has a 32 percent marginal rate on...Ch. 16 - Prob. 31APCh. 16 - Prob. 32APCh. 16 - Prob. 33APCh. 16 - Prob. 34APCh. 16 - Prob. 35APCh. 16 - Prob. 36APCh. 16 - Ms. Turney owns a one-half interest in an...Ch. 16 - Prob. 38APCh. 16 - Prob. 39APCh. 16 - Prob. 40APCh. 16 - Mr. Erwins marginal tax rate on ordinary income is...Ch. 16 - Prob. 42APCh. 16 - Prob. 43APCh. 16 - Prob. 44APCh. 16 - Prob. 45APCh. 16 - Mrs. Wolter, an unmarried individual, owns...Ch. 16 - Prob. 1IRPCh. 16 - Prob. 2IRPCh. 16 - Prob. 3IRPCh. 16 - Prob. 4IRPCh. 16 - Prob. 5IRPCh. 16 - Two years ago, Ms. Eager loaned 3,500 to her...Ch. 16 - Prob. 7IRPCh. 16 - This year, Ms. Tan had a 29,000 capital loss...Ch. 16 - Prob. 9IRPCh. 16 - Mr. Pugh has a 7,900 adjusted basis in his limited...Ch. 16 - Prob. 11IRPCh. 16 - Mr. Durst died on March 8. His taxable estate...Ch. 16 - Prob. 13IRPCh. 16 - Prob. 1RPCh. 16 - Prob. 2RPCh. 16 - Prob. 1TPCCh. 16 - Ms. Kaspari, who has a 24 percent marginal rate on...Ch. 16 - Prob. 3TPCCh. 16 - Prob. 4TPC
Knowledge Booster
Similar questions
- Marcia, a shareholder in a corporation with stores in five states, donated stock with a basis of 10,000 to a qualified charitable organization in 2018. Although the stock of the corporation was not traded on a public stock exchange, many shares had been sold over the past several years. Based on the average selling price for the stock in 2018, Marcia deducted 95,000 on her 2018 tax return. Marcia received a notice from the IRS that the 95,000 deduction had been reduced to 10,000 because she had not obtained a qualified appraisal or attached a summary of her appraisal to her tax return. Marcia has asked you to advise her on this matter. Write a letter containing your conclusions to Ms. Marcia Meyer, 1311 Santos Court, San Bruno, CA 94066. Partial list of research aids: Reg. 1.170A13(c)(2).arrow_forwardIn 2000, Ms. Ennis, a head of household, contributed $45,000 in exchange for 450 shares of Seta stock. Seta is a qualified small business. This year, Ms. Ennis sold all 450 shares for $117,000. Her only other investment income was an $8,300 long-term capital gain from the sale of land. Her taxable income before consideration of her two capital transactions is $599,000. Assume the taxable year is 2023. Use Individual tax rate schedules and Tax rates for capital gains and qualified dividends. Required: a. Compute Ms. Ennis's income tax and Medicare contribution tax for the year. b. How would the computation change if Ms. Ennis acquired the Seta stock in 2011 instead of 2000? c. How would the computation change if Ms. Ennis acquired the Seta stock in 2020 instead of 2000? Answer is not complete. Complete this question by entering your answers in the tabs below. Required A Required B Required C Compute Ms. Ennis's income tax and Medicare contribution tax for the year. Note: Round your…arrow_forwardIn 2000, Ms. Ennis, a head of household, contributed $76,000 in exchange for 760 shares of Seta stock. Seta is a qualified small business. This year, Ms. Ennis sold all 760 shares for $138,000. Her only other investment income was an $8,400 long-term capital gain from the sale of land. Her taxable income before consideration of her two capital transactions is $567,000. Assume the taxable year is 2022. Use Individual tax rate schedules and Tax rates for capital gains and qualified dividends. Required: Compute Ms. Ennis’s income tax and Medicare contribution tax for the year. How would the computation change if Ms. Ennis acquired the Seta stock in 2011 instead of 2000? How would the computation change if Ms. Ennis acquired the Seta stock in 2019 instead of 2000?arrow_forward
- Hello, please help me with the following question. Kim is an employee of Azure Corporation. In the current year, she receives a cash salary of $30,000 and also is given 10 shares of Azure stock for services she renders to the corporation. The shares in Azure Corporation are worth $1,000 each. a. How will the transfer of the 10 shares to Kim be handled for tax purposes? b. Kim's basis in the stock is $. c. What is Azure Corporation's total compensation deduction for Kim's services?$arrow_forwardn 2000, Ms. Ennis, a head of household, contributed $76,000 in exchange for 760 shares of Seta stock. Seta is a qualified small business. This year, Ms. Ennis sold all 760 shares for $124,000. Her only other investment income was an $7,700 long-term capital gain from the sale of land. Her taxable income before consideration of her two capital transactions is $549,000. Assume the taxable year is 2022. Use Individual tax rate schedules and Tax rates for capital gains and qualified dividends. Compute Ms. Ennis’s income tax and Medicare contribution tax for the year. How would the computation change if Ms. Ennis acquired the Seta stock in 2019 instead of 2000?arrow_forwardMr. Franklin Sharp owns 750 shares of Guard Inc. The ACB per share is $21.50. On June 15, 2023, he sells all of these shares for $13.75 each. On June 21, 2023, he purchases 400 shares of Guard Inc. at a cost of $12.15 each. He continues to own the shares at the end of the year. What are the income tax consequences of these transactions including the ACB of the shares on hand at December 31, 2023?arrow_forward
- Kim is an employee of Azure Corporation. In the current year, she receives a cash salary of $106,200 and also is given 45 shares of Azure stock for services she renders to the corporation. The shares in Azure Corporation are worth $2,500 each. a. How will the transfer of the 45 shares to Kim be handled for tax purposes? Kim's basis in the stock is $fill in the blank 2 ______? b. What is Azure Corporation's total compensation deduction for Kim's services?$fill in the blank 3 _________?arrow_forwardIn 2007, Duncan purchased 2,000 shares of stock for $50,000 in a midsize local company with gross assets of $15,000,000. In 2022. Duncan sold the stock for $68,000. How is the gain treated for tax purposes? Multiple Choice O $18,000 capital gain and taxed at preferential rates. $9,000 excluded from gross income under § 1202 and $9,000 taxed at 28% $9,000 excluded from gross income under 5 1202 and $9,000 taxed at regular rates $13,500 excluded from gross income under $1202 and $4,500 taxed at preferential ratesarrow_forwardFrank and Fiory are owners of F Corp. Frank owns 800 shares with a basis of $8,000 and Fiory owns 200 shares with a basis of $2,000. Frank has the corporation buy back 100 of his shares @ $120 per share, planning on reporting a $2,000 long-term capital gain on his 1040. As Frank’s tax advisor, what would you tell him about how the IRS might view this arraignmentarrow_forward
- Mary Jarvis is a single individual who is working on filing her taxreturn for the previous year. She has assembled the following relevant information:●● She received $82,000 in salary.●● She received $12,000 of dividend income. She received $5,000 of interest income on Home Depot bonds.● She received $22,000 from the sale of Disney stock that was purchased 2 years priorto the sale at a cost of $9,000.●● She received $10,000 from the sale of Google stock that was purchased 6 monthsprior to the sale at a cost of $7,500.●● Mary receives one exemption ($4,050), and she has allowable itemized deductions of$7,500. These amounts will be deducted from her gross income to determine her taxableincome.Assume that her tax rates are based on the tax tables presented in the chapter.a. What is Mary’s federal tax liability?b. What is her marginal tax rate?c. What is her average tax rate?arrow_forwardTiny and Tim each owns half of the 100 outstanding shares of Flower Corporation. This year, Flower reported taxable income of $6,000. In addition, Flower received $20,000 of life insurance proceeds due to the death of an employee (Flower paid $500 in life insurance premiums this year). Flower had $5,000 of accumulated E&P at the beginning of the year. (Leave no answer blank. Enter zero if applicable.) a. What is Flower’s current E&P? b. Flower distributed $6,000 on February 15 and $30,000 on August 1. What total amount of dividends will Tiny and Tim report? (Do not round intermediate calculations.) c. What amount of capital gain (if any) would Tiny and Tim report on the distributions in part (b) if their stock bases are $2,000 and $10,000, respectively? (Do not round intermediate calculations.)arrow_forwardBetty joined Jim in forming DBJ Corporation. Betty contributed appreciated land for 90 percent of the stock in DBJ. Jim received 10 percent of the DBJ stock valued at $15,000. Determine Jim's tax consequences in each of the following alternative scenarios. (Leave no answer blank. Enter zero if applicable.) a. Jim received the stock in exchange for providing computer-related services for the corporation. What amount of income or gain does Jim recognize on the exchange? What is Jim's basis in the stock he received in the exchange? Income or gain recognized Jim's basis in the stockarrow_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