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
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A key goal of tax planning is to legally minimize or defer taxes. This is done by focusing on key components of taxable income. How can timing strategies and income-shifting strategies be used to affect deductions for adjusted gross income (AGI), dependency exemptions, itemized deductions, and tax credits? Provide at least one example for each.
A key goal of tax planning is to legally minimize or defer taxes. This is done by focusing on key components of taxable income. How can timing strategies and income-shifting strategies be used to affect deductions for adjusted gross income (AGI), dependency exemptions, itemized deductions, and tax credits? Provide at least one e
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
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
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
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
Which of the following elements of innocent spouse relief is the most difficult to prove A. Joint return may have been filed B. The joint return must contain an understatement of tax attributable to an erroneous item of the other spouse C. The spouse seeking relief must establish that he or she did not know, and did not hav
Jordan Broadcasting Company Solution: Shares Outstanding 8,000,000 a) Earnings per share before stock issue = Earnings $24,000,000 New Stock Issue 3,000,000 Earnings per share after stock issue = Price of new shares $40 P/E 23 b) Earnings per Share = P/E = Stock Price =
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.
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
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
Gulf Oil Company plans to buy back 1 million shares of its own stock from its cash reserves at $40 a share. This will increase the bankruptcy costs by $10 million, and the debt/assets ratio from 20% to 25%. Using careful reasoning, find the following: (A) The total value of the company, its debt and equity, before the buyback
Milford Company had 500 units of "Tank" in its inventory at a cost of $4 each. It purchased, for $2,800, 300 more units of "Tank." Milford then sold 400 units at a selling price of $10 each, resulting in a gross profit of $1,600. The cost flow assumption used by Johnson is? Be sure to show your work.
Explain Tax capital gain, and how it impacts an individuals (or businesses) tax liability. Do you think it is OK or if it needs to be fixed.
S-corporations must allocate their income to each shareholder on a strictly pro rata, per day basis. Is this also true with respect to partnerships? How do partnerships allocate income, deduction, loss, and credit items to partners?
Tim is married to Tina. For their fifth wedding anniversary, Tim buys Tina a $50,000 diamond bracelet. Tim's younger brother Bob decides to buy (and give) a matching bracelet for his fiancé Marci to celebrate their five month anniversary. Has either brother entered into a tax situation which a tax planner, will need to provi
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
Kodax, a cash basis corporation is considering paying $50,000 of expenses at the end of this year rather than waiting until next year. Kodax marginal tax rate for the current year is 25 percent but it expects to be in the 34 percent marginal tax bracket next year. Kodax uses a 7 percent discount rate for evaluation purposes.
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
Where is the AAA account reported on Form 1120S? In what situation does the AAA account have the largest impact?
Company ABC Fund started the year with a NAV of $12.50. By the year-end, its NAV equals $12.10. The fund paid year-end distribution of income and capital gains of $1.50. What was the (pretax) rate of return to an investor in the fund? Please explain as well as show mathematically. Please support with two references.
A client advises you that her aunt gave her twenty lottery tickets as a holiday gift. One of the lottery tickets was a winner in the $50,000 game. Your client wants to know if the lottery winnings are exempted from federal income tax as the lottery ticket was given as a gift. What is the response to the client?
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
Could you please help me with the following accounting/taxation question?: Why are certain pass-through items separately stated?
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
Accounting: Fraud Betty King is the new controller at EZdot.com. The previous controller was fired for incompetence. Ezdot.com 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
Less than 300 words answering why an investor may assert that "A company cannot grow faster than its sustainable growth rate."
An investor asserts: "A company cannot grow faster than its sustainable growth rate." True or false? Explain why. Just less than 300 words answering why an investor may assert, "A company cannot grow faster than its sustainable growth rate." References.
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
Suppose the market risk premium is currently 6%. If investors were to become more risk-averse, the market risk premium might increase to 8%. If investors become more risk-averse, what effect would you expect this to have on the prices of financial assets? Prices would increase? Prices would be unaffected? Prices would decre
1. Why would a company use straight-line depreciation to prepare its financial statements and the declining balance method using twice the straight-line rate to prepare it tax return? 2. A company purchased a machine on January 1, 2011 for $400,000. The machine had an expected useful life of 10 years and it was expected