McGraw-Hill's Taxation of Individuals and Business Entities 2019 Edition
1st Edition
ISBN: 9781259918391
Author: Professor, Brian C. Spilker
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 6, Problem 32P
In each of the following independent cases, indicate the amount (1) deductible for AGI, (2) deductible from AGI, and (3) deductible neither for nor from AGI before considering income limitations or the standard deduction.
- a) Fran spent $90 for uniforms for use on her job. Her employer reimbursed her for $75 of this amount under an accountable plan (and did not report the reimbursement as wages).
- b) Timothy, a plumber employed by ACE Plumbing, spent $65 for small tools to be used on his job, but he was not reimbursed by ACE.
- c) Jake is a perfume salesperson. Because of his high pay, he receives no allowance or reimbursement from his employer for advertising expenses even though his position requires him to advertise frequently. During the year, he spent $2,200 on legitimate business advertisements.
- d) Trey is a self-employed, special-duty nurse. He spent $120 for uniforms.
- e) Mary, a professor at a community college, spent $340 for magazine subscriptions. The magazines were helpful for her research activities, but she was not reimbursed for the expenditures.
- f) Wayne lost $325 on the bets he made at the race track, but he won $57 playing slot machines.
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In each of the following independent cases, indicate the amount (1) deductible for AGI, (2) deductible from AGI, and (3) deductible neither for nor from AGI before considering income limitations or the standard deduction.
a. Timothy, a plumber employed by ACE Plumbing, spent $65 for small tools to be used on his job, but he was not reimbursed by ACE
b. Jake is a perfume salesperson. Because of his high pay, he receives no allowance or reimbursement from his employer for advertising expenses even though his position requires him to advertise frequently. During the year, he spent $2,200 on legitimate business advertisements.
c. Trey is a self-employed, special-duty nurse. He spent $120 for uniforms.
d. Mary, a professor at a community college, spent $340 for magazine subscriptions. The magazines were helpful for her research activities, but she was not reimbursed for the expenditures.
e. Wayne lost $325 on the bets he made at the race track, but he won $57 playing slot machines.
In each of the following independent cases, indicate the amount (1) deductible for AGI, (2) deductible from AGI, and (3) deductible neither for nor from AGI before considering income limitations or the standard deduction. (Leave no answer blank. Enter zero if applicable.)
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a. Fran spent $182 for uniforms for use on her job. Her employer reimbursed her for $116 of this amount under an accountable plan (and did not report the reimbursement as wages).
Deductible for AGI?
Deductible from AGI?
Not deductible?
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b. Timothy, a plumber employed by ACE Plumbing, spent $127 for small tools to be used on his job, but he was not reimbursed by ACE.
Deductible for AGI?
Deductible from AGI?
Not deductible?
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c. Jake is a perfume salesperson. Because of his high pay, he receives no allowance or reimbursement from his employer for advertising expenses even though his position requires him to advertise frequently. During the year, he spent $4,250 on legitimate business advertisements.
Deductible…
Determine whether the taxpayer in each of the following situations is in constructive receipt of income. If not, explain when the income will be constructively received.
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Regan is an employee of BIF Manufacturing, earning $3,000 per month. She purchases merchandise from BIF costing $2,000 in January of the current year. To pay for the merchandise, BIF agrees to deduct $75 per month from her pay, reducing it to $2,925 per month before other withholdings.
Answer: see the attached file.Â
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My question:Â
I don't understand why $75 is the constructive receipt of income. Regan is not receiving anything and it is not available to him. Also, why would Regan include $3,000 include in gross income? isn't it 3000-75?
Chapter 6 Solutions
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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