Loose Leaf for McGraw-Hill's Taxation of Individuals and Business Entities 2019 Edition
10th Edition
ISBN: 9781260189728
Author: Brian C. Spilker Professor, Benjamin C. Ayers, John Robinson Professor, Edmund Outslay Professor, Ronald G. Worsham Associate Professor, John A. Barrick Assistant Professor, Connie Weaver
Publisher: McGraw-Hill Education
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Chapter 6, Problem 31P
To determine
Indicate (1) the amount deductible for AGI, (2) the amount of deductible from AGI, and (3) the amount of deductible neither deductible for nor deductible from AGI before considering income limitations or the standard deduction for the given situation.
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In January of year 0, Justin paid $8,800 for an insurance policy that covers his business property for
accidents and casualties. Justin is a calendar-year taxpayer who uses the cash method of accounting.
What amount of the insurance premium may Justin deduct in year O in each of the following alternative
scenarios?
Note: Leave no answers blank. Enter zero if applicable.
d. Instead of paying an insurance premium, Justin pays $8,800 to rent his business property from April 1 of year 0 throug
March 31 of year 1.
Deductible amount
During 2020, Jackie sent her brother Junnie $2,500 via a telegraphic transfer through El Banco Prieto. The bank’s remittance clerk made a mistake and credited Junnie with $250,000 which he promptly withdrew. The bank demanded the return of the mistakenly credited excess, but Junnie refused to do so. The BIR entered the picture and investigated Junnie. Would the BIR be correct if it determines that he earned a taxable income under the facts?
No, it was not her fault that the funds in excess of $2,500 were credited to him.
Yes, income is a taxable income regardless of the source
No, he had no income because he had no right to the mistakenly credited funds.
No, the funds in excess of $2,500 were in effect donated to her.
In January of year 0, Justin paid $9,400 for an insurance policy that covers his business property for accidents and casualties. Justin is a calendar-year taxpayer who uses the cash method of accounting.
What amount of the insurance premium may Justin deduct in year 0 in each of the following alternative scenarios?
Note: Leave no answers blank. Enter zero if applicable.
a. The policy covers the business property from April 1 of year 0 through March 31 of year 1.
b. The policy begins on February 1 of year 1 and extends through January 31 of year 2.
c. Justin pays $10,600 for a 24-month policy that covers the business from April 1, year 0, through March 31, year 2. Note: Do not round intermediate calculations.
d. Instead of paying an insurance premium, Justin pays $9,400 to rent his business property from April 1 of year 0 through March 31 of year 1.
Chapter 6 Solutions
Loose Leaf for McGraw-Hill's Taxation of Individuals and Business Entities 2019 Edition
Ch. 6 - It has been suggested that tax policy favors...Ch. 6 - Prob. 2DQCh. 6 - Prob. 3DQCh. 6 - Explain why Congress allows self-employed...Ch. 6 - Prob. 5DQCh. 6 - Prob. 6DQCh. 6 - Prob. 7DQCh. 6 - Prob. 8DQCh. 6 - Prob. 9DQCh. 6 - Prob. 10DQ
Ch. 6 - Prob. 11DQCh. 6 - Prob. 12DQCh. 6 - Prob. 13DQCh. 6 - Prob. 14DQCh. 6 - Prob. 15DQCh. 6 - Prob. 16DQCh. 6 - Contrast ceiling and floor limitations, and...Ch. 6 - Prob. 18DQCh. 6 - Prob. 19DQCh. 6 - Explain how the standard deduction is rationalized...Ch. 6 - Prob. 21DQCh. 6 - Prob. 22DQCh. 6 - Prob. 23DQCh. 6 - Prob. 24PCh. 6 - Prob. 25PCh. 6 - Prob. 26PCh. 6 - Prob. 27PCh. 6 - Prob. 28PCh. 6 - Prob. 29PCh. 6 - Prob. 30PCh. 6 - Prob. 31PCh. 6 - In each of the following independent cases,...Ch. 6 - Prob. 33PCh. 6 - Prob. 34PCh. 6 - Prob. 35PCh. 6 - Doctor Bones prescribed physical therapy in a pool...Ch. 6 - Charles has AGI of 50,000 and has made the...Ch. 6 - Prob. 38PCh. 6 - Prob. 39PCh. 6 - This year Randy paid 28,000 of interest. (Randy...Ch. 6 - This year, Major Healy paid 40,000 of interest on...Ch. 6 - Prob. 42PCh. 6 - Calvin reviewed his cancelled checks and receipts...Ch. 6 - Prob. 44PCh. 6 - Prob. 45PCh. 6 - Prob. 46PCh. 6 - Prob. 47PCh. 6 - Prob. 48PCh. 6 - Prob. 49PCh. 6 - Prob. 50PCh. 6 - Prob. 51CPCh. 6 - Read the following letter and help Shady Slim with...Ch. 6 - Jeremy and Alyssa Johnson have been married for...Ch. 6 - Prob. 54CPCh. 6 - Prob. 55CP
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