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
What exactly is a liquidating distribution? Does its tax treatment differ from that of a nonliquidating distribution? If so, how? Is there a justification for the difference? If so, what is it?
We think of dividends as being paid out in cash. After all, most dividends that people receive from investment in corporate stocks are traditionally paid in cash. However, do they have to be paid out in cash? If they are not, does the payment of these dividends in other property potentially cause different tax consequences to
Teddy Bears Inc had $500,000 of retained earnings on Dec 31, 2010. The company paid common dividends of $20,000 and had retained earnings of $300,000 on Dec 31, 2009. How much did Teddy Bears Inc earn in 2010 and what would the earnings per share be if $40,000 shares of common stock were outstanding?
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................................
Sadbury Corporation produces and sells a single product whose selling price is $210.00 per unit and whose variable expense is $73.50 per unit. The company's monthly fixed expense is $873,600. Required: a. Assume the company's monthly target profit is $27,300. Determine the unit sales to attain that target profit. Show your wor
If dividends are distributions that come out of a corporation's earnings and profits (E&P), what exactly is E&P? What is it attempting to measure? How is it calculated?
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
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
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
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
Identify the three requirements under Section 351 that must be satisfied for the nonrecognition provisions to apply. Also identify the consequences of a Section 351 transfer including how the basis is determined by the shareholders and the corporation.
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
A tile manufacturer has supplied the following data: Boxes of tile produced and sold 625,000 Sales revenue $2,975,000 Variable manufacturing expense $1,720,000 Fixed manufacturing expense