Problem 4-30 (LO. 1, 2)Determine the taxpayer's gross income for tax purposes in each of the following situations:If an amount is zero, enter "0".a.b.C.Deb, a cash basis taxpayer, traded a corporate bond with accrued interest of $300 forcorporate stock with a fair market value of $12,000 at the time of the exchange. Deb's cost ofthe bond was $10,000. The value of the stock had decreased to $11,000 by the end of theyear.Deb needed $10,000 to make a down payment on her house. She instructed her broker to sellsome stock to raise the $10,000. Deb's cost of the stock was $3,000. Based on her broker'sadvice, instead of selling the stock, she borrowed the $10,000 using the stock as collateral forthe debt.Deb's boss gave her two tickets to the Rabid Rabbits rock concert because she met her salesquota. At the time she received the tickets, each ticket had a face price of $200 and was sellingon eBay for $300. On the date of the concert, the tickets were selling for $250 each. Deb andher son attended the concert.Gross Income0

Taxes are the amount of dues or liabilities that needs to be paid to government by the individual.…

Determine the taxpayer's gross income for tax purposes in each of the following situations: If an amount is zero, enter "0". a. Deb, a cash basis taxpayer, traded a corporate bond with accrued interest of $300 for corporate stock with a fair market value of $12,000 at the time of the exchange. Deb's cost of the bond was $10,000. The value of the stock had decreased to $11,000 by the end of the year. Gross Income

Determine the taxpayer's gross income for tax purposes in each of the following situations: If an amount is zero, enter "0". a. Deb, a cash basis taxpayer, traded a corporate bond with accrued interest of $300 for corporate stock with a fair market value of $12,000 at the time of the exchange. Deb's cost of the bond was $10,000. The value of the stock had decreased to $11,000 by the end of the year. Gross Income

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter4: Gross Income: Concepts And Inclusions

Section: Chapter Questions

Problem 30P

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Determine the taxpayers gross income for tax purposes in each of the following situations: a. Deb, a cash basis taxpayer, traded a corporate bond with accrued interest of 300 for corporate stock with a fair market value of 12,000 at the time of the exchange. Debs cost of the bond was 10,000. The value of the stock had decreased to 11,000 by the end of the year. b. Deb needed 10,000 to make a down payment on her house. She instructed her broker to sell some stock to raise the 10,000. Debs cost of the stock was 3,000. Based on her brokers advice, instead of selling the stock, she borrowed the 10,000 using the stock as collateral for the debt. c. Debs boss gave her two tickets to the Rabid Rabbits rock concert because she met her sales quota. At the time she received the tickets, each ticket had a face price of 200 and was selling on eBay for 300. On the date of the concert, the tickets were selling for 250 each. Deb and her son attended the concert.
LO.3, 8, 9 The taxpayer has generated excess capital losses (both short-term and long-term) for the current year. Discuss the income tax ramifications of the losses if the taxpayer is: a. An individual. b. A C corporation. c. An S corporation. d. A partnership.
LO.3, 4, 5 Contrast the income taxation of individuals and C corporations as to: a. Alternative minimum tax. b. Dividend income. c. Qualified business income deduction of 20 percent. d. Use of the cash method of accounting. e. Accounting period used for tax purposes. f. Applicable tax rates. g. Due date of the tax return.
LO.3 Taupe, a calendar year taxpayer, has a long-term capital loss of 4,000 and a short-term capital loss of 4,000. How are these items handled for tax purposes if Taupe is: a. An individual? b. A C corporation?
LO.3, 4, 5 Using the legend provided below, classify each statement under 2019 tax law. a. A foreign tax credit is available. b. The deduction of charitable contributions is subject to percentage limitation(s). c. Excess charitable contributions can be carried forward for five years. d. On the contribution of inventory to charity, the full amount of any appreciation can be claimed as a deduction. e. Excess capital losses can be carried forward indefinitely. f. Excess capital losses cannot be carried back. g. A net short-term capital gain is subject to the same tax rate as ordinary income. h. The deduction for qualified business income may be available. i. A dividends received deduction is available. j. The like-kind exchange provisions of 1031 are available. k. A taxpayer with a fiscal year of May 1April 30 has a due date for filing a Federal income tax return of July 15. l. Estimated Federal income tax payments may be required.
PERSONAL TAXES Joe and Jane Keller are a married couple who file a joint income tax return, where the tax rates are based on the tax tables presented in the chapter. Assume that their taxable income this year was 165,000. a. What is their federal tax liability? b. What is their marginal tax rate? c. What is their average tax rate?