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Tax Law Justifications Provisions

Discuss the probable justification for each of the following provisions of the tax law:
a) The s 179 election to expense certain business assets upon their acquisition
b) Favorable treatment accorded to research and development expenditures
c) A deduction allowed for income resulting from U.S. production(manufacturing) activities
d) The deduction allowed for contributions to qualified charitable organizations
e) An election that allows certain corporations to avoid the corporate income tax and pass losses through to their shareholders
f) A tax credit for amounts spent to furnish care for minor children while the parent works

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a) The 179 election to expense certain business assets upon their acquisition
Section 179 allowed the direct expensing of the total cost of equipment rather than depreciating them over time. The reason was to stimulate the economy by encouraging companies to purchase equipment for expansion while savings income tax.

b) Favorable treatment accorded to research and development expenditures
By allowed R&D costs to be fully expensed, companies were able to fully deduct the costs rather than waiting to see if a product was developed and then successfully marketed. Without the ...

Solution Summary

Tax law justification provisions is examined. The tax credits for amounts spend to furnish care for minor children while the parent works is determined.

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