Principles Of Taxation For Business And Investment Planning 2020 Edition
23rd Edition
ISBN: 9781259969546
Author: Sally Jones, Shelley C. Rhoades-Catanach, Sandra R Callaghan
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Textbook Question
Chapter 1, Problem 10AP
Mrs. Doyle, a resident of Rhode Island, traveled to Delaware to purchase an oil painting from a local artist. The cost of the painting was $9,400. Rhode Island has a 7 percent sales and use tax, while Delaware has no sales and use tax.
- a. How much Rhode Island use tax does Mrs. Doyle owe on the purchase she made in Delaware?
- b. How much Rhode Island use tax would Mrs. Doyle owe if she purchased the painting from a gallery in New York City and paid 8.75 percent state and local sales tax on the transaction?
- c. How much Rhode Island use tax would Mrs. Doyle owe if she purchased the painting from a dealer in Milwaukee and paid Wisconsin’s 5 percent sales tax on the transaction?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Richere is a new client. She tells you that during the past year for fun she made quilts and sometimes sold them at local craft fairs. She said she earned about $1,750 doing this. Her tax preparer should:
(a) Report this income on Schedule C and assist Richere to reconstruct her expenses for any items related to the production of the quilts, booth costs, and travel to the craft fairs.
(b) Tell Richere that because she has no profit motive, the income is not taxable and the expenses are not deductible.
(c) Explain the hobby loss rules to Richere and explain that the income should be reported on Schedule 1, line 8 but as this is a hobby, any expenses she has are not deductible.
(d) Advise Richere that the income is reportable and that you will assist her to reconstruct her expenses which may be deducted on Schedule A, line 16.
Quin owns a house in Connecticut and an apartment in New Orleans. Quin spends most of her time in Connecticut, so she sometimes rents out the apartment in New Orleans when she is not there. This year, Quin rented out the apartment for thirty days and personally used the apartment for forty days. How will Quin’s rental activity be classified for tax purposes and why?
A.Nontaxable activity because Quin used the apartment personally more than she rented it out.
B.Mixed-use activity because Quin both rented out the apartment and used it personally.
C.Mixed-use activity because Quin rented out the apartment for more than 14 days and personally used the apartment for the greater of 14 days or 10% of the rental days.
D.Rental activity because Quin rented out the apartment for more than 14 days.
Denise, a single, cash-method taxpayer, paid the following taxes in the current year:
Denise's employer withheld $6,000 for federal income taxes, $1,600 for state income taxes, and $3,600 for FICA from her paychecks. Denise purchased a new car and paid $720 in sales tax and $100 for the license. The car's FMV was $24,000 and it weighed 3,000 pounds. The county also assessed a property tax on the car. The tax was 2% of the car's value and
$10 per hundredweight.Denise uses the car 100% of the time for personal purposes. Denise sold her house on May 1 of the current year. The county's property tax on the home for the year is $2,300, payable on February 1 of the current year. The county's real property tax year is the calendar year.
Denise's AGI for the year is $61,000 and her other itemized deductions exclusive of taxes are $9,900 (disregard any leap year).
Read the requirements.
Requirement a. What is Denise's deduction for taxes in the current year? (Assume…
Chapter 1 Solutions
Principles Of Taxation For Business And Investment Planning 2020 Edition
Ch. 1 - Prob. 1QPDCh. 1 - Prob. 2QPDCh. 1 - Prob. 3QPDCh. 1 - Prob. 4QPDCh. 1 - Prob. 5QPDCh. 1 - A local government imposed a new 2 percent tax on...Ch. 1 - Prob. 7QPDCh. 1 - Prob. 8QPDCh. 1 - Prob. 9QPDCh. 1 - Prob. 10QPD
Ch. 1 - Prob. 11QPDCh. 1 - Prob. 12QPDCh. 1 - Prob. 13QPDCh. 1 - Prob. 14QPDCh. 1 - One way for the federal government to increase tax...Ch. 1 - The Internal Revenue Code and Treasury regulations...Ch. 1 - Mr. Josh Kenney, a U.S. citizen and resident of...Ch. 1 - Prob. 2APCh. 1 - Prob. 3APCh. 1 - This year, State A raised revenues by increasing...Ch. 1 - Prob. 5APCh. 1 - Prob. 6APCh. 1 - Prob. 7APCh. 1 - Prob. 8APCh. 1 - Prob. 9APCh. 1 - Mrs. Doyle, a resident of Rhode Island, traveled...Ch. 1 - Prob. 11APCh. 1 - Prob. 12APCh. 1 - Mr. and Mrs. Underhill operate a hardware store in...Ch. 1 - Prob. 14APCh. 1 - Wallis Company produces circuit boards in a...Ch. 1 - Prob. 1IRPCh. 1 - Prob. 2IRPCh. 1 - Bailey Company, which has offices in six states,...Ch. 1 - Prob. 4IRPCh. 1 - Yarrow Company orders 500,000 of office furniture...Ch. 1 - Acme Corporation was formed under the laws of...Ch. 1 - Prob. 7IRPCh. 1 - Prob. 8IRPCh. 1 - Prob. 9IRPCh. 1 - Mr. Imhoff, age 72, has lived in Los Angeles his...Ch. 1 - Prob. 1TPCCh. 1 - KTR Company earns a 10 profit on each unit of...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Ben lost his job when his employer moved its plant. During the year, he collected unemployment benefits for three months, a total of 1,800. While he was waiting to hear from prospective employers, he painted his house. If Ben had paid someone else to paint his house, the cost would have been 3,000. The cost of the paint Ben used was 800. What is Bens gross income for tax purposes from the above events?arrow_forwardDetermine 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.arrow_forward
Recommended textbooks for you
Property, Plant and Equipment (PP&E) - Introduction to PPE; Author: Gleim Accounting;https://www.youtube.com/watch?v=e_Hx-e-h9M4;License: Standard Youtube License