Concepts in Federal Taxation 2019 (with Intuit ProConnect Tax Online 2017 and RIA Checkpoint 1 term (6 months) Printed Access Card)
26th Edition
ISBN: 9781337702621
Author: Kevin E. Murphy, Mark Higgins
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 5, Problem 37P
To determine
Identify whether the transactions given meet the ordinary, necessary, and reasonable requirements.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Christa has made a $25,000 pledge to the American Red Cross (a public charity). Christa expects AGI of $200,000 this year. Which
of the following assets should she donate in an effort to maximize her overall tax benefit?
a. Cash of $25,000
b. Stock purchased three years ago for $18,000 with a current FMV of $25,000
c. Stock purchased six months ago for $28,000 with a current FMV of $25,000
d. Christa should be indifferent among the three choices.
Melanie is employed full-time as an accountant for a national hardware chain. She recently started a private consulting practice, which provides tax advice and financial planning to the general public. For this purpose, she maintains an office in her home. Expenses relating to her home for 2020 are as follows:
Real property taxes
$3,600
Interest on home mortgage
3,800
Operating expenses of home
900
Melanie's residence cost $350,000 (excluding land) and has living space of 2,000 square feet, of which 20% (400 square feet) is devoted to business. The office was placed in service in February 2019, and under the Regular Method, Melanie had an unused office in the home deduction of $800 for 2019. Assume there is sufficient net income from her consulting practice.
Round deprecation to the nearest dollar.
a. What amount can Melanie claim this year for her office in the home deduction under the Regular Method?
b. What is Melanie's office in the home deduction under the…
Oliver owns shares of a mutual fund. During the year, he received $2,200 in dividend distributions, $500 of which he
immediately spent on travel and entertainment. He elected to use the remaining $1,700 to purchase additional shares of
the fund. What amount of Oliver's dividend income is subject to tax for that year? $0 $500 $1,700 $2,200
Chapter 5 Solutions
Concepts in Federal Taxation 2019 (with Intuit ProConnect Tax Online 2017 and RIA Checkpoint 1 term (6 months) Printed Access Card)
Ch. 5 - Prob. 1DQCh. 5 - Why does the computation of adjusted gross income...Ch. 5 - Prob. 3DQCh. 5 - Prob. 4DQCh. 5 - Prob. 5DQCh. 5 - Prob. 6DQCh. 5 - Prob. 7DQCh. 5 - Prob. 8DQCh. 5 - Prob. 9DQCh. 5 - What is the difference between a trade or business...
Ch. 5 - Prob. 11DQCh. 5 - Prob. 12DQCh. 5 - Prob. 13DQCh. 5 - Prob. 14DQCh. 5 - Prob. 15DQCh. 5 - Prob. 16DQCh. 5 - Prob. 17DQCh. 5 - Prob. 18DQCh. 5 - Prob. 19DQCh. 5 - Prob. 20DQCh. 5 - Prob. 21DQCh. 5 - Prob. 22DQCh. 5 - Prob. 23DQCh. 5 - Prob. 24DQCh. 5 - Prob. 25DQCh. 5 - Prob. 26PCh. 5 - Prob. 27PCh. 5 - Prob. 28PCh. 5 - Prob. 29PCh. 5 - Prob. 30PCh. 5 - Prob. 31PCh. 5 - Prob. 32PCh. 5 - Prob. 33PCh. 5 - Prob. 34PCh. 5 - Prob. 35PCh. 5 - Prob. 36PCh. 5 - Prob. 37PCh. 5 - Prob. 38PCh. 5 - Prob. 39PCh. 5 - Prob. 40PCh. 5 - Prob. 41PCh. 5 - Prob. 42PCh. 5 - Prob. 43PCh. 5 - Prob. 44PCh. 5 - Prob. 45PCh. 5 - Prob. 46PCh. 5 - Prob. 47PCh. 5 - Prob. 48PCh. 5 - Prob. 49PCh. 5 - Prob. 50PCh. 5 - Prob. 51PCh. 5 - Prob. 52PCh. 5 - Prob. 53PCh. 5 - Prob. 54PCh. 5 - Prob. 55PCh. 5 - Prob. 56PCh. 5 - Ray, 83, is a used car dealer. He lives in a rural...Ch. 5 - Prob. 58PCh. 5 - Prob. 59PCh. 5 - Prob. 60PCh. 5 - Prob. 61PCh. 5 - Prob. 62PCh. 5 - Prob. 63PCh. 5 - Prob. 64PCh. 5 - Prob. 65PCh. 5 - Prob. 66PCh. 5 - Prob. 67PCh. 5 - Prob. 68PCh. 5 - Prob. 69PCh. 5 - Prob. 70PCh. 5 - Prob. 71PCh. 5 - Prob. 72IIPCh. 5 - Prob. 73IIPCh. 5 - Prob. 74IIPCh. 5 - Prob. 75IIPCh. 5 - Prob. 76IIPCh. 5 - Prob. 77IIPCh. 5 - Prob. 78IIPCh. 5 - Prob. 79IIPCh. 5 - Prob. 80IIPCh. 5 - Prob. 81IIPCh. 5 - Prob. 91CPCh. 5 - Prob. 92DCCh. 5 - Prob. 93DCCh. 5 - Prob. 94DCCh. 5 - Prob. 95TPCCh. 5 - Allison and Paul are married and have no children....
Knowledge Booster
Similar questions
- By using the information below, please help me with questions 1 through 6. PLEASE EXPLAIN THOROUGHLY FOR A BETTER UNDERSTANDING THANK YOU!! PLEASE ASSIST ME WITH THE FOLLOWING 6 QUESTIONS USING THE PROVIDED INFORMATION BELOW. THANK YOU! Lillian and Jackson Clark are a married couple in their early 20s living in Los Angeles. Jackson Clark earned $93,000 in 2018 from his sales job. During the year, his employer withheld $11,685 for income tax purposes. In addition, the Clarks received interest of $350 on a joint savings account, $750 interest on tax-exempt municipal bonds and dividends of $400 on common stocks. At the end of 2018, the Clarks sold two stocks, A and B. Stock A was sold for $700 and had been purchased four months earlier for $800. Stock B was sold for $1,500 and had been purchased 3 years earlier for $1,100. Although his company's pension plan covers Jackson, he plans to contribute $5,500 to a traditional deductible IRA for 2018. Their only child, Carter, age 2, received…arrow_forwardKate’s records for the year reflect the following information: Paid a church $9,500, of which $6,000 was contributed to the church and $3,500 was paid to enroll her child in its school. Paid $100 dues to a business organization. Paid $1,500 cash to qualified public charitable organizations. Donated stock having a fair market value of $1,500 to a qualified charitable organization. She purchased the stock 2 years earlier for $3,000. Kate’s adjusted gross income (AGI) for the year was $20,000. What is the amount of her charitable contribution deduction? Group of answer choices $7,500 $9,000 $13,500 $10,000arrow_forwardWhile vacationing in Florida in November, Sally was seriously injured in an automobile accident (she died several days later). How are the following transactions handled for tax purposes?a. Bruce, Sally’s son and executor, incurred $6,200 in travel expenses in flying to Florida, retrieving the body, and returning it to Frankfort, Kentucky, for burial.b. Early in the year, Sally had pledged $50,000 to the building fund of her church. Bruce paid this pledge from the assets of the estate.c. Prior to her death, Sally had promised to give her nephew, Gary, $20,000 when he passed the bar exam. Gary passed the exam late in the year, and Bruce kept Sally’s promise by paying him $20,000 from estate assets.d. At the scene of the accident and before the ambulance arrived, someone took Sally’s jewelry (i.e., Rolex watch and wedding ring) and money. The property (valued at $33,000) was not insured and was never recovered.e. As a result of the accident, Sally’s auto was totally destroyed. The auto…arrow_forward
- 1. Karen received a stock portfolio upon the death of her grandmother. The stock originally cost her grandmother $32,000, but was worth $250,000 when she died. What is Karen's tax basis in the stock portfolio? Explain. In your response, please make sure to take all of the facts above into consideration. You can refer back to the text, lecture videos, and the IRS website. Please make sure to support whatever conclusion you decide to present.arrow_forwardMelanie is employed full-time as an accountant for a national hardware chain. She also has recently started a private consulting practice, which provides tax advice and financial planning to the general public. For this purpose, she maintains an office in her home. Expenses relating to her home for 2020 are as follows: Real property taxes $5,000 Interest on home mortgage 6,000 Operating expenses of home 1,250 Melanie's residence cost $412,000 (excluding land) and has living space of 2,000 square feet, of which 28% (560 square feet) is devoted to business. The office was placed in service in February 2019, and under the Regular Method, Melanie had an unused office in the home deduction of $500 for 2019. Assume there is sufficient net income from her consulting practice. a. What amount can Melanie claim this year for her office in the home deduction under the Regular Method?$ b. What is Melanie's office in the home deduction under the Simplified Method?$arrow_forwardClara is a doctor at Royal Perth Hospital (RPH). Clara has been working for RPH for the last 5 years. Clara has reached out to you for some assistance. Clara has provided you with the following information in relation to her 2022 tax returns. Clara earns $156,000.00 as a doctor from RPH. Clara has savings of $50,000.00 in her bank account which earnt her interest of $500.00. Clara has shares in BHP and was paid an unfranked dividend of $1,000.00. During the year Clara attended a medical course which cost $2,000.00. She paid a medical membership fee for $5,000.00. - - - - - - - - - Clara did some after hours GP work throughout the year and earnt $20,000.00. Clara loves animals and donates $110.00 per month to RSPCA. Clara's scrubs were a little worn out so she bought a whole new set for $1,000.00. Clara sometimes has to be on call in the hospital where she does not have much to do and so she constantly buys fashion magazines to keep her entertained. That totalled to $300.00 for the…arrow_forward
- Melanie is employed full-time as an accountant for a national hardware chain. She also has recently started a private consulting practice, which provides tax advice and financial planning to the general public. For this purpose, she maintains an office in her home. Expenses relating to her home for 2020 are as follows: Real property taxes $4,750 Interest on home mortgage 5,700 Operating expenses of home 1,188 Melanie's residence cost $415,000 (excluding land) and has living space of 2,000 square feet, of which 29% (580 square feet) is devoted to business. The office was placed in service in February 2019, and under the Regular Method, Melanie had an unused office in the home deduction of $1,600 for 2019. Assume there is sufficient net income from her consulting practice. What amount can Melanie claim this year for her office in the home deduction under the Regular Method?arrow_forwardAngela Bower’s husband passed away last year. In 2020, Angela lives in a house with her son Jonathan (age 8) in Fairfield, Connecticut. She also supports her mother, Mona (age 67), who lives just down the road in a 1 bedroom apartment. Angela earned $175,000 in salary as an advertising agency executive. She also had two investment assets during the year. The first was a municipal bond for the city of Fairfield that she paid $10,000 for on the first day of this year that earns a 2% interest rate, paid out at the end of the year. The second was a U.S. Treasury bill that she also paid with $10,000 on the first day of the year that earns a 3% interest rate, paid out at the end of the year. Mona likes to spend her time in leisure and does not work during the year and, as a result, did not file a tax return. Angela has no itemized deductions, no AMT, no credits, and no prepayments. What filing status does Angela use? Qualifying Widower or Widow What was the amount of realizable income for…arrow_forwardDetermine Ken's gross income. Ken is 63 years old and unmarried. He retired at age 55 when he sold his business, Understock.com. Though Ken is retired, he is still very active. Ken reported the following financial information this year. Assume Ken files as a single taxpayer.Ken won $1,200 in an illegal game of poker (the game was played in Utah, where gambling is illegal). 1. Ken sold 1,000 shares of stock for $32 a share. He inherited the stock two years ago. His tax basis (or investment) in the stock was $31 per share. 2. Ken received $25,000 from an annuity he purchased eight years ago. He purchased the annuity, to be paid annually for 20 years, for $210,000. 3. Ken received $13,000 in disability benefits for the year. He purchased the disability insurance policy last year. 4. Ken decided to go back to school to learn about European history. He received a $500 cash scholarship to attend. He used $300 to pay for his books and tuition, and he applied the rest toward his new car…arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you