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tax questions




Question;117. Taylor, a;widow, makes cash gifts to her five married children (including their spouses);and to her seven grandchildren. What is the maximum amount Taylor can give for;calendar year 2014 without using her unified transfer tax credit?;?;118. Without;obtaining an extension, Pam files her income tax return 55 days after the due;date. With her return, she pays an additional tax of $60,000. Disregarding any;interest element, what is Pam?s penalty for failure to pay and to file?;119. On his 2014;income tax return, Andrew omitted income and overstated deductions to the;extent that his income tax was understated by $500,000. Disregarding any;interest element, what is Andrew?s penalty if the understatement was due to;a. Negligence.;b. Civil;fraud.;c. Criminal;fraud.;120. Several;years ago, Logan purchased extra grazing land for his ranch at a cost of $240,000.;In 2014, the land is condemned by the state for development as a highway;maintenance depot. Under the condemnation award, Logan receives $600,000 for;the land. Within the same year, he replaces the property with other grazing;land. What is Logan?s tax situation if the replacement land cost;a. $210,000?;b. $360,000?;c. $630,000?;d. Why?;?;121. For the tax;year 2014, Noah reported gross income of $300,000 on his timely filed Federal;income tax return.;a. Presuming;the general rule applies, when does the statute of limitations on assessments;normally expire?;b. Suppose;Noah inadvertently omitted gross income of $76,000. When does the statute of;limitations on assessments expire?;c. Suppose;the omission was deliberate and not inadvertent. When does the statute of;limitations on assessments expire?;122. Paige is;the sole shareholder of Citron Corporation. During the year, Paige leases a;building to Citron for a monthly rental of $80,000. If the fair rental value of;the building is $60,000, what are the income tax consequences to the parties;involved?;123. In 1985;Roy leased real estate to Drab Corporation for 20 years. Drab Corporation made;significant capital improvements to the property. In 2005, Drab decides not to;renew the lease and vacates the property. At that time, the value of the;improvements is $800,000. Roy sells the real estate in 2014 for $1,200,000 of;which $900,000 is attributable to the improvements. When is Roy taxed on the;improvements made by Drab Corporation?;124. The Federal;income tax is based on a pay?as?you?go system and has become a ?mass tax.?;Explain this statement.;ANSWER: The;pay-as-you-go system is present in the wage and other withholding procedures.;In the case of self- employed persons, it is manifested in the required;quarterly payments for estimated taxes. The income tax became a mass tax during;World War II when its coverage was extended to 74% of the population (from less;than 6% in 1939).;125. In terms of;Adam Smith?s canons of taxation, how does the Federal income tax fare as far as;economy is concerned?;126. Due to the;population change, the Goose Creek School District has decided to close one of;its high schools. Since it has no further need of the property, the school is;listed for sale. The two bids it receives are as follows;United Methodist Church $1,700,000;Planet Motors 1,600,000;The United Methodist Church would use the property to;establish a sectarian middle school. Planet, a well-known car dealership, would;revamp the property and operate it as a branch location.;If you were a member of the School District board, what;factors would you consider in evaluating the two bids?;127. Morgan;inherits her father?s personal residence including all of the furnishings. She;plans to add a swimming pool and sauna to the property and rent it as a;furnished house. What are some of the ad valorem property tax problems Morgan;can anticipate?;128. In 2012;Deborah became 65 years old. In 2013 she added a swimming pool, and in 2014 she;converted the residence to rental property and moved into an assisted living;facility. Since 2011, Deborah?s ad valorem property taxes have decreased once;and increased twice. Explain..;129. A lack of;compliance in the payment of use taxes can be resolved by several means. In;this regard, comment on the following;a. Registration;of automobiles.;b. Reporting;of Internet purchases on state income tax returns.;?;130. What are;the pros and cons of the following state and local tax provisions?;a. An ad;valorem property tax holiday made available to a manufacturing plant that is;relocating.;b. Hotel;occupancy tax and a rental car surcharge.;c. A;back-to-school sales tax holiday.;131. What is a;severance tax? How productive can it be in terms of generating revenue?;132. What is the;difference between an inheritance tax and an estate tax? Who imposes these;taxes?;133. Logan dies;with an estate worth $20 million. Under his will, $10 million passes to his;wife while $10 million goes to his church. What is Logan?s Federal estate tax;result?;134. With regard;to state income taxes, explain what is meant by the ?jock tax??;135. Virtually;all state income tax returns contain checkoff boxes for donations to various;causes. On what grounds has this procedure been criticized?.


Paper#39449 | Written in 18-Jul-2015

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