Question;Devry ACCT553 week 1-5 homework;week 1 homework;3-31.Tom and Linda are married taxpayers who file a joint;return. They have itemized deductions of $11,950 and four exemptions. Assuming;an adjusted gross income of $40,000.00 what is their taxable income for 2011?;3-32.Compute Marie's taxable income for 2011, assuming she;is single and claims two dependent children. Her adjusted gross income is $70,000;and she has itemized deductions of $9,000.;3-36.Compute Stanley's taxable income for 2011, assuming;he has $1,000 in wages from working in a grocery store and $2,000 in interest;income from some bonds he owns. Stanley, age 16, is claimed as a dependent on;his parents' return.;13-55.Mr. Z, a non-dealer, sold assets on an installment;plan. Determine Mr. Z's gross income for 2011. Relevant data include;13-69. Comprehensive Problem;Bill is a cash-basis, calendar-year taxpayer. Which of the following December;items result in gross income or deductions for the current year?;a. Check received for December rent, $700, not deposited until January 4;b. Check for $1,100 to pay Bill's state income taxes mailed December 28;cashed January 7;c. Cash received in the amount of $500 for services to be rendered the;following year;d. Interest of $800 credited to his savings account, added to Bill's account;balance;e. Check received for January rent, $700, deposited on January 9;f. Charitable contribution of $300, charged on Bill's MasterCard;g. Bills totaling $2,000 sent for services rendered during the year;uncollected as of year-end;week 2 homework;Rent and;Security Deposits 4-25;Billy;Dent, as the owner of an apartment building, receives and makes the following;payments during 2012;Received;in January 2012 rent that was $5,000;due in;December 2011;Received;in December 2012 rent not 4,000;due until;January 2013;Security;deposit which is to be 500;refunded;when tenant vacates the;apartment;How much;rental income must Billy Dent include on his 2012 income tax return?;Divorce;Payments 4-32.;Arnold;and Barbara Cane were divorced in June 2012. Pursuant to the divorce decree;Arnold is obliged to perform as follows;a.;Transfer title of their personal home to Barbara. They purchased the house in;1998 and their basis today is $400,000. The fair market value of the house is;$500,000. The house is subject to a 25-year, $250,000 mortgage.;b. Arnold;is to continue making payments on the house until it is fully paid off. In;2012, Arnold made payments totaling $18,000.;c. Arnold;is to make $3,000 per month payments to Barbara. Of this amount one-half is for;child support. The divorce decree further states that alimony is to cease upon;the death of the wife. In 2012, he made six payments.;How do;the transactions in the divorce agreement affect Arnold's and Barbara's taxable;income?;Investment;Income 5-26.;A.;Fluent, an investor in stocks and bonds, wanted to increase his portfolio but;wanted to minimize his tax liability on the income from the bonds. He is;presented with the following alternative investments: U.S. Series EE bonds;bonds for industrial development for mass transit, and qualified veterans;mortgage bonds. Which should he choose for his investment? Why?;Trade or;Business Deductions 6-29.;Which of;the following trade or business expenditures of Ajax Inc. are deductible on its;current year tax return? If an expenditure is not deductible, explain why it is;not a valid deduction.;Expenditure;Amount;Salaries;and wages to employees;$400,000;Purchase;of new office building;250,000;Payment;of illegal parking fines of;1,400;President;Payment;of wedding expenses for;1,600;President's;daughter's wedding;Entertainment;expenses related to;25,000;company;business;Interest;on money borrowed to buy;9,000;tax-exempt;securities;Total;expenditures;$700,400;Salaries;and Wages Deductions 6-34.;For the;current month, Jackson Cement Co. incurred payroll expenses as follows;Gross;salaries and Wages;$675,000;Payroll;taxes;OASDI;(Social Security Tax);employer's;share;HI;(Medicare tax)-employer's share;9,788;726,638;Amounts;withheld and paid to the government;Employee;income taxes withheld;(108,990);OASDI;Employees' share;(41,850);HI-employees;share;(9,788);a. What;amount can Jackson claim as a tax deduction for salary and wage expense?;b. How;much can Jackson deduct as tax expense?;week 3 homework;7-7. Differentiate between the following: active income;passive income, and portfolio income.;7-13. Briefly, what is "material participation"?;Why is the determination of whether a taxpayer materially participates;important?;7-46. Mary Beth is a CPA, devoting 3,000 hours per year to;her practice. She also owns an office building in which she rents out space to;tenants. She devotes none of her time to the management of the office building.;She has a property management firm make all management decisions for her.;During 2012, she incurred a loss, for tax purposes, of $30,000 on the office;building. How must Mary Beth treat this loss on her 2012 tax return?;8-34. Mike and Sally Card file a joint return for the 2012;tax year. Their adjusted gross income is $65,000 and they incur the following;interest expenses;Qualified education loans: $3,500;Personal loan 1,000;Home mortgage loan 4,000;Loan used to purchase a variety of stocks;Bonds, and securities 15,000;Investment income and related expenses amount to $7,000 and $500;respectively. What is Mike and Sally's interest deduction for the 2012 tax;year?;8-40. In each of the following independent cases determine;the amount of charitable contributions allowed the individual before;consideration of any percentage limitations.;a. Charlie Chubbs contributed an item of inventory from his sole;proprietorship to a public charity for its use. The fair market value of the;asset was $800 and his basis was $600.;b. Durwood Dodson contributed some shares of common stock that he had held;long-term to a private charity. The basis of the stock was $8,000 and it had a;fair market value of $7,000.;c. Esther Ensign contributed tangible personal property that she had held;long-term to a public charity. The asset had a fair market value of $10,000 and;a basis of $6,000. The charity intended to sell the asset and use the proceeds;for charitable purposes.;week 4 homework;After;you have reviewed these recommendations, please contact me so we can go over;any additional questions you may have.;John?s Tax Issues;1. (a) How is the $300,000 treated for purposes of federal tax income?;(b) How is the $25,000 treated for purposes of federal tax income?;(c) What is your determination regarding reducing the taxable amount of income;for both (a) and (b) above?;(d) Is it more beneficial to continue leasing the business space or to buy the;building?;Jane?s Tax Issues;2. (a) What are the different tax consequences between paying down the mortgage;(debt) and assuming a new mortgage (debt) for federal income tax purposes?;(b) Can John and Jane Smith utilize a 1031 tax exchange to buy a more expensive;house using additional money from John's case?;What is a 1031 Tax Deferred Exchange?;week 5 homework;Questions: 14-24 and 14-51, 17-1 and 17-24;Problems (Show your work.): 14-52, 17-40, and 17-49;14-24 What is the purpose of the dividends received deduction? What;corporations are entitled to claim this deduction? What dividends qualify for;this deduction?;What is the purpose of the dividends-received deduction? What corporations;are entitled to claim this deduction? What dividends qualify for this;deduction? The purpose of the dividends received deduction is so that;corporations would not be taxed at a corporate level a shareholder level or if;when dividends or a recipient corporation.;14-51 What is the purpose of the reconciliation of taxable income with book;income?;17-1 Identify and briefly describe the seven types of corporate;reorganization.;Type A: Mergers and Consolidations;Type B: Acquisition --- Target Corporation Subsidiary;Type C: Acquisition --- Target Corporation Liquidation;Type D: Transfer;Type E: Recapitalization;Type F: Identity Change;Type G: Transfer;17-24 Define and differentiate a spin-off, split-off, and split-up.;Spin off ?;Split off-;Split up ?;14-52 Sam Rogers forms a corporation. Sam transfers to the corporation;property having a basis to him of $15,000 and a fair market value of $27,000;for 900 shares of the $10 par stock of the corporation. A year later, Bill;Morrison, who is not related to Sam, transfers property having a basis to him;of $1,000 and a fair market value of $3,000 for 100 shares of the corporate;stock. The corporation issued no other stock.;? a. How much gain does Sam recognize on his exchange? What is the basis to;Sam of his 900 shares?;? b. How much gain does Bill recognize on his exchange? What is the basis to;Bill of his 100 shares?;? c. What gain or loss is recognized by the corporation when it issues its;shares to Sam? What is the basis to the corporation of the property it received;from Sam?;? d. What is the gain or loss recognized by the corporation when it issues;its shares to Bill? What is the basis to the corporation of the property it;received from Bill?;17-40 Superior Corporation acquired Taylor Corporation pursuant to a;statutory merger under state law. As a result of the merger, Taylor;Corporation's former shareholders received common stock in Superior having a;value of $300,000, long-term bonds of Superior with a principal amount (and;fair market value) of $500,000, and cash of $200,000. What type of;reorganization has taken place? Describe the tax consequences to Taylor;Corporation, its former shareholders, and Superior Corporation.;17-49 Shipyard Corp. acquired Boatworks Corp. in a Type A reorganization on;July 1, 2012. On the date of acquisition, Boatworks had a deficit in its;earnings and profits of $30,000. Although Shipyard had no accumulated earnings;and profits, its current earnings and profits from its calendar-year 2012;operations totalled $40,000. What amount of the acquired earnings and profits;deficit of $30,000 can be used to off -set Shipyard's current earnings and;profits for 2012?
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