Income Tax Fundamentals 2020
38th Edition
ISBN: 9780357391129
Author: WHITTENBURG
Publisher: Cengage
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Question
Chapter 3, Problem 3MCQ
To determine
Concept Introduction:
Gross income is the starting point for calculating a taxpayer’s liability. It includes all the income from any sources unless there is an exception in the law. In gross income, non-cash items are included at the fair market value. These incomes are excluded from the
To explain: The recommendation as an accountant.
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Students have asked these similar questions
Your qualitative answers should be written in full sentences with depth to your responses when needed. For questions and problems requiring computations, you need to share your supporting calculations.
1a. Jim files his return one month after the due date and pays the remaining $8,000 of tax owed by him. What are his delinquency penalties?
1b. Why is income-shifting considered such a major tax planning concept?
1c. Olivia is being audited by the IRS. The revenue agent determines that certain expenses that were deducted on her return are not valid, and he accordingly makes adjustments to her tax liability. Upon receipt of her 30-day letter, she phones you, a CPA, for advice regarding possible future action on the matter. What options would you discuss with Olivia?
1d. Compute the taxable income for 2020 under each of the following circumstances:
Jim is married and files a joint return. Jim and his wife have two dependent children. They have adjusted gross income of $30,000 and…
You were hired as the accountant of XYZ Trading, a sole proprietorship business owned by Mr. Francisco Montano. One of your responsibilities is to prepare the income tax return of Mr. Montano. Annually, Mr. Montano pays P50,000 to P100,000 income tax. He told you to help him lessen his income taxes by 10%. As his accountant, what will you do to help him?
You are a CPA and do tax returns for individuals. A woman enters your office and asks you to complete her tax return. During your meeting, she mentions that she is expecting about $5000 in refund, and needs that to pay off a debt, that will result in a $1000 fine if she does not pay in the next month. You complete her tax return, but the refund is much lower than she expected, only $1000. She is very mad, and consults with another CPA. The other CPA determines that you made a significant mistake, but the period to file returns has passed. It will cost $500 to file an amendment. What damages is the woman likely entitled to?
Group of answer choices
A. None, because accountants can't be perfect
B. $500, because that is all that is needed to make it right
C. $500, and potentially $1000, because of the consequential damages of not being able to pay off her loan on time
D. $4000, because that is the difference between the proper refund and your mistake.
Chapter 3 Solutions
Income Tax Fundamentals 2020
Ch. 3 - Prob. 1MCQCh. 3 - Prob. 2MCQCh. 3 - Prob. 3MCQCh. 3 - Which of the following formulas represents the...Ch. 3 - Prob. 5MCQCh. 3 - Prob. 6MCQCh. 3 - Heather drives her minivan 953 miles for business...Ch. 3 - Prob. 8MCQCh. 3 - Prob. 9MCQCh. 3 - Under the high-low method, the federal per diem...
Ch. 3 - Prob. 11MCQCh. 3 - Prob. 12MCQCh. 3 - Prob. 13MCQCh. 3 - Prob. 14MCQCh. 3 - Prob. 15MCQCh. 3 - Prob. 16MCQCh. 3 - Prob. 17MCQCh. 3 - Prob. 18MCQCh. 3 - Prob. 19MCQCh. 3 - Prob. 20MCQCh. 3 - Prob. 21MCQCh. 3 - Prob. 22MCQCh. 3 - Prob. 23MCQCh. 3 - Stewie, a single taxpayer, operates an activity as...Ch. 3 - Prob. 2PCh. 3 - Lawrence owns a small candy store that sells one...Ch. 3 - Business with gross receipts of $25 million or...Ch. 3 - Teresa is a civil engineer who uses her automobile...Ch. 3 - Prob. 7PCh. 3 - Martha is a self-employed tax accountant who...Ch. 3 - Prob. 9PCh. 3 - Go to the U.S. General Services Administration...Ch. 3 - Prob. 11PCh. 3 - Prob. 12PCh. 3 - Marty is a sales consultant. Marty incurs the...Ch. 3 - Prob. 14PCh. 3 - Prob. 15PCh. 3 - Cooper and Brandy are married and file a joint...Ch. 3 - Prob. 17PCh. 3 - Prob. 18PCh. 3 - Prob. 19PCh. 3 - Prob. 20PCh. 3 - Cindy operates a computerized engineering drawing...Ch. 3 - Prob. 22PCh. 3 - Prob. 23PCh. 3 - Prob. 24PCh. 3 - Lew is a practicing CPA who decides to raise...
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