SWFT Individual Income Taxes
43rd Edition
ISBN: 9780357391365
Author: YOUNG
Publisher: Cengage
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Use the following Total Tax / Annual Income relationship to determine which of the following is Beverly's total tax for last year if her income last was $155,000. What total income tax did Beverly pay in income tax.
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Identify the amount, if any, that these individuals must include in gross income in the following independent cases. Assume that the individuals are on the cash method of accounting and report income on a calendar-year basis.
a. Elmer was an extremely diligent employee this year, and his employer gave him three additional days off with pay (Elmer’s gross pay for the three days totaled $1,200, but his net pay was only $948).
b. Amax purchased new office furniture and allowed each employee to take home old office furniture valued at $250.
Juan Diego began the year with a tax basis in his partnership interest of $53,600. During the year, he was allocated $21,440 of partnership ordinary business income, $75,040 of §1231 losses, and $32,160 of short-term capital losses and received a cash distribution of $53,600. a. What items related to these allocations does Juan Diego actually report on his tax return for the year? [Hint: See Regulations §1.704-1(d)(2) and Revenue Rule 66-94.]
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- Juan Diego began the year with a tax basis in his partnership interest of $53,800. During the year, he was allocated $21,520 of partnership ordinary business income, $75,320 of §1231 losses, and $32,280 of short-term capital losses and received a cash distribution of $53,800. Note: Do not round intermediate calculations. a. What items related to these allocations does Juan Diego actually report on his tax return for the year? [Hint: See Regulations §1.704-1(d)(2) and Revenue Rule 66-94.] b. If any deductions or losses are limited, what are the carryover amounts, and what is their character? [Hint: See Regulations §1.704-1(d).]arrow_forwardSarah owns a jewelry store and prepares her financial statements using the accrual method of accounting. However, she completes her Schedule C on her individual income tax return using the cash method. Given the following accrual method information from the income statement and balance sheet, determine her business net income under the cash method for tax reporting purposes. Accrual method net income $40,000 Beginning accounts receivable $60,000 Ending accounts receivable $37,000 Beginning accounts payable $24,000 Ending accounts payable $30,000 Sarah owns a jewelry store and prepares her financial statements using the accrual method of accounting. However, she completes her Schedule C on her individual income tax return using the cash method. Given the following accrual method information from the income statement and balance sheet, determine her business net income under the cash method for tax reporting purposes. Accrual method net income $40,000 Beginning accounts receivable…arrow_forwardYolanda is a cash basis taxpayer with the following transactions during the year: Cash received from sales of products $66,000 Cash paid for expenses (except rent and interest) 40,000 Rent prepaid on a leased building for 18 months 45,000 beginning December 1 Prepaid interest on a bank loan, paid on 5,000 December 31 for the next 3 months Calculate Yolanda’s income from her business for this calendar year. Sales income $_____________ Expenses: Other than rent and interest $______________ Rent $_____________________ Interest $__________________ Net income $_______________arrow_forward
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