Carol makes the following business gifts during the tax year.Calculate Carol's allowed deduction for each business gift and her total allowed deduction. If an amount is zero, enter "0".DoneeAmountDeduction1. Mr. Jones (a client)$20 $fill in the blank 12. Mr. Brown (a client)32 fill in the blank 23. Mrs. Green (a client) received a $15 gift while herhusband, Mr. Green (a non-client) received an $18 gift33 fill in the blank 34. Ms. Gray (Carol's supervisor)45 fill in the blank 45. Mr. Edwards (a client) receiving a display rack with Carol's company name on it75 fill in the blank 56. Various customers (receiving ball point pens with the company name on them)140 fill in the blank 6 Total business gift deduction $fill in the blank 7

Business gift deduction mainly allowed within the limit of $25.

Answered: Carol makes the following business…

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter3: Tax Formula And Tax Determination : An Overview Of Property Transactions

Section: Chapter Questions

Problem 3CPA

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Carol makes the following business gifts during the tax year.

Calculate Carol's allowed deduction for each business gift and her total allowed deduction. If an amount is zero, enter "0".

*Donee*	*Amount*	*Deduction*
1.	Mr. Jones (a client)	$20		$fill in the blank 1
2.	Mr. Brown (a client)	32		fill in the blank 2
3.	Mrs. Green (a client) received a $15 gift while her husband, Mr. Green (a non-client) received an $18 gift	33		fill in the blank 3
4.	Ms. Gray (Carol's supervisor)	45		fill in the blank 4
5.	Mr. Edwards (a client) receiving a display rack with Carol's company name on it	75		fill in the blank 5
6.	Various customers (receiving ball point pens with the company name on them)	140		fill in the blank 6
	Total business gift deduction		$fill in the blank 7

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Troy, a cash basis taxpayer, is employed by Eagle Corporation, also a cash basis taxpayer. Tray is a full-time employee of the corporation and receives a salary of 60,000 per year. He also receives a bonus equal to 10% of all collections from diems he serviced during the year. Determine the tax consequences of the following events to the corporation and to Troy: a. On December 31, 2019, Troy was visiting a customer. The customer gave Troy a 10,000 check payable to the corporation for appraisal services Troy performed during 2019. Troy did not deliver the check to the corporation until January 2020. b. The facts are the same as in part (a), except that the corporation is an accrual basis taxpayer and Troy deposited the check on December 31, but the bank did not add the deposit to the corporations account until January 2020. c. The facts are the same as in part (a), except that the customer told Troy to hold the check until January 2020 when the customer could make a bank deposit that would cover the check.
Determine whether the taxpayer has income that is subject to taxation in each of the following situations: a. Capital Motor Company is going out of business. As a result, June is able to purchase a car for 12,000; its original sticker price was 25,000. b. Chuck is the sole owner of Ransom, Inc., a corporation. He purchases a machine from Ransom for 10,000. Ransom had paid 50,000 for the machine, which was worth 30,000 at the time of the sale to Chuck. c. Gerry is an elementary school teacher. She receives the Teacher of the Month Award for February. As part of the award, she gets to drive a new car supplied by a local dealer for a month. The rental value of the car is 400 per month. d. Payne has worked for Stewart Company for the last 25 years. On the 25th anniversary of his employment with Stewart, he receives a set of golf clubs worth 1,200 as a reward for his years of loyal service to the company. e. Anna enters a sweepstakes contest that was advertised on the back of a cereal box, and wins 30,000. The prize will be paid out in 30 annual installments of 1,000. She receives her first check this year. f. Terry buys an antique vase at an estate auction for 780. Upon returning home, she accidentally drops the vase and finds that a 100 bill had been taped inside it.

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