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Section 61 of the IRS Code

Section 61 of the IRS Code defines income as "income from whatever source derived unless otherwise excluded." In determining income, several key concepts have evolved from this definition. Explain the following concepts and provide at leas one example of each. Explain which concept you think is most beneficial from a taxpayer's

Taxation: Date to complete exchange transaction; basis in property acquired.

For a transaction as a like kind exchange the property must received by the earlier of the due date including extension of the return for the year in which the transfer of the property being exchange occurred or by what day after the property given up in the exchange is transferred. A. 30 days after the transfer B. 60 days a

Taxation: Condemnation award gains; replacement real property

William Stevenson sold his warehouse to a public utility for $24,000 under a threat of condemnation. He paid $25000 for the property and spent an addition $1000 for a new roof. He had claimed $3600 depreciation in conjunction with the condemnation award, Mr. Stevenson paid $201 in legal fee. Mr. Stevenson A. Realize no gain

Taxes: Form 6252 and Form 4797. Installment sale reporting

Before completing form 6252 and 4797 for an installment sale of real property, the tax professional would manually A. Determine the gain on the sale for each year of the installment sale B. Determine the return of capital and installment of gain on the sale C. Determine the interest to be paid for each year of the installme

Taxation: Business equipment sale; installment sale

1. January 2008, Shari purchased a $20,000 piece of equipment for exclusive use in his business. She claimed a $6,000 section 179 deduction and $6,654 MACRS depreciation. She sold the equipment in November 2010 for $7,000. What is the amount and type of gain or loss and where on form 4797 does Shari report the sale? A. $346 s

S Corporation versus Partnership: Taxes & Liability

Please help me with an assignment by discussing the following questions: Are the tax consequences of the formation of a partnership similar to those of S corporations? How? If there are differences, how and why are they different? Please include some references for further investigatory purposes.

Intermediate Accounting II - Recording Taxes

ACC423 - Intermediate Accounting II Problem 1: The following information pertains to OMV Company for 2013: Deferred Tax Liability, January 1: $76,000 Related Cumulative Temporary Difference December 31: $240,000 Pretax Accounting Income: $627,000 Taxable Income: $502,000 Tax Rate: 38% The cumulative temporary di

Special Order Effect on Company's Total NOI

A customer has asked Clougherty Corporation to supply 4,000 units of product M97, with some modifications, for $40.10 each. The normal selling price of this product is $48.00 each. The normal unit product cost of product M97 is computed as follows: Direct Material - $18.50 Direct Labor - $1.20 Variable Mfg OH - $8.40 Fixe

Article review: CPA Client Tax Fraud and the CPA

See attached article file. 1. Explain the purpose of the article 2. Provide an overview of the article and keep topics 3. If you agree with the article, do you feel the IRS handles Tax fraud fairly and the CPA doe enough to protect the client? If you disagree with the article, what should the IRS do to conduct and pr

Detailed answers with sources listed.

State and Local tax questions 1. Westinghouse raises the question as to the constitutional status of various tax incentives designed to induce in-state location. Are investment tax credits and similar credits limited to in-state expenditures under a constitutional cloud after Westinghouse? What about the practice of limiting

S corporation election

To elect S corporation status, all of the shareholders must consent to the election. This is very different from most decisions that a corporation may make. After all, most decisions (including the decision to revoke S corporation status and go back to being to being a C corporation) require only a simple majority of shareholde

How to handle environmental protestors in your lobby; what do you do?

You are CEO of a natural resources company, and your offices are located prominently in downtown. About noon, one day, a bunch of environmental protestors show up in your lobby with signs labeling you as a polluter. They spread some substance on the floor of your lobby. Needless to say, the media have been invited. What

I need help writing a 2-3 page paper based on the scenario below.

Accounting: Fraud Betty King is the new controller at The previous controller was fired for incompetence. has some severe cash-flow problems that have become exacerbated by the recent acquisition of another firm. The financials of both EZ and the other firm are as clear as Mississippi mud. The new compan

Finding overall variable overhead efficiency

Company applies manufacturing overhead to products on the basis of standard machine hours. For most recent month, company based its budget on 4,400 machine hours. Budgeted and actual overhead costs for the month are: Variable OH: Budgeted Actual Supplies 21,500

Determine/Calculate Impact on Profit

Zaccagnino Corporation makes a range of products. The company's predetermined overhead rate is $14 per direct labor-hour, which was calculated using the following budgeted data: Variable manufacturing overhead........$105,000 Fixed manufacturing overhead............$385,000 Direct labor-hours................................

High-Low Points Method and the High/Low Method

1. High-Low Points Method BEYONDBIKES.COM considers electricity a mixed cost. By using a scatter chart, George has determined that there is a relationship between electricity expense and the number of hours per month the store is open. During the past year, electricity expense totaled $7200 in the month that the store was o

Seven standard techniques of misrepresentation

Shenanigans book goes through seven "standard" techniques of misrepresentation for earnings and four for cash flow. Does Sarbanes-Oxley help prevent these situations? (i.e., why didn't Sarbanes-Oxley protect us from the financial sector melt-down?) Also, one can discuss "how did these occur" in terms of rule-based vs. princi

Report to investors in the annual report on firm's litigation risks

The cigarette industry is subject to litigation for health hazards posed by its products. The industry has been negotiating a settlement of these claims with state and federal governments. As the CFO for Philip Morris, one of the larger firms in the industry, what information would you report to investors in the annual report on

Assessing a Firm's Long-Term Assets

As the CFO of a company, what indicators would you look at to assess whether your firm's long-term assets were impaired? What approaches could be used, either by management or an independent valuation firm, to assess the dollar value of any asset impairment? As a financial analyst, what indicators would you look at to assess whe

Exchange Corp: Evaluate a Performance Report

Let's look at P10-25 in chapter 10, page 445, (Critiquing a Report; Preparing a Performance Budget) of the e-book and discuss the first question. Exchange Corp. is a company that acts as a facilitator in tax-favored real estate swaps. Such swaps, known as 1031 exchanges, permit participants to avoid some or all of the capita

Liquidation, costs of offering, partnership formation, taxable income

See attached file for proper format. 1. What happens to a subsidiary's tax attributes (e.g., net operating loss, E & P, capital loss carryover) upon a 332 liquidation? 2. The stock of Magenta Corporation is owned by Fuchsia Corporation (90%) and Marta (10%). Magenta is liquidated on September 2, 2011, pursuant to a plan of

Kona Rural Electric Accounting for Customer Deposits

80. The Kona Rural Electric Co-op (KREC) is an accrual basis public entity. All new customers are required to pay a deposit equal to 3 times the customer's monthly bill or $100, whichever is greater. The purpose of the deposit is to ensure that timely payment is made on accounts. The funds so received are not segregated from oth

Tax Research advising shareholders of implications

73. Omega Investments, Inc., was formed in 1991 by 10 unrelated individual investors. It operates a chain of electronic stores. The corporation suffered losses in its early years but has become profitable in recent years. The corporation elected S corporation status in 1991. Over the years, the original shareholders have gift

Tax Consequences of Issues

In each of the following problems, identify the tax issue(s) posed by the facts presented. Determine the possible tax consequences of each issue that you identify. 57. Lydia owns 75% of Flower Farms, a partnership. She also owns land that she leases to Flower Farms for $6,000 per month. 58. Micheal buys a piece of property

Terms of property or alimony payment to be tax free to Elizabeth

Kevin and Elizabeth are negotiating a divorce settlement. Kevin is in the 35 percent marginal tax bracket and Elizabeth is in the 15 percent marginal tax bracket. Kevin has offered to pay Elizabeth $15,000 each year for 10 years; payments would cease if Elizabeth dies before the end of the 10- year period. Elizabeth is willi

Explain the tax treatment of an employee for one or more of the following: Payment of wages FICA and FUTA Payment of health care or other benefits Free use of the company car Payment of travel expenses Other employee business expenses that are not reimbursed.

Let's focus more on the tax aspects of being an employee. Explain the tax treatment of an employee for one or more of the following: Payment of wages FICA and FUTA Payment of health care or other benefits Free use of the company car Payment of travel expenses Other employee business expenses that are not reimbursed.