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This 12 page Class Notes was uploaded by Darren Balistreri on Monday September 28, 2015. The Class Notes belongs to ACCT 421 at Old Dominion University taught by Walter Berry in Fall. Since its upload, it has received 12 views. For similar materials see /class/215342/acct-421-old-dominion-university in Accounting at Old Dominion University.
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Date Created: 09/28/15
4 a FOR b FROM c FOR d FROM e NA 9 Not reasonable for the services rendered 10 a Yes b No c Yes d Yes reduced by 100 insurance recovery 10 of AGI e Yes 13 a No tax reason only b Yes business reason for purchase that is discount on pm 18 No No No Yes No No No No 20 No 21 5000 for Lexington City Council Lobbyingefforts to influence local 23 Expenses related to investigating the restaurant are deductible wl the new restaurant is opened Expenses related to investigating th deductible if the motel is acquired and opened considered start u 29 Erika receives no tax benefit in either case Hillary and James can F for mortgage interest and real estate taxes if they pay the mortgag 30 Isiah repairs expense deductible Rachel replacement capital expenditure 31 Father brother grandsoncorporation Potential limitation on loss recognition between related parties an deductions between related parties 32 a Interest on municipal bonds is taxexempt therefore no b an interest expense on funds used to acquire taxexempt deductible 34 Salary 82000 itemized Dividend income 5000 Contribu Interest income 3000 Real estz Capital loss 900 Mortgag Alimony paid 12000 State inc IRA deduction 5000 Total ite AGI 72100 Take the itemized deductions as they are larger than the standard 37 Green corporation stock City of York bonds theft of business use 38 Accrual Sales 95000 Wages expense 29000 Office expenses 2000 Bad debt expense 500 Utilities amp telephone expense 5400 Insurance expense 4000 Rent expense 9000 AGI 45100 39 In 2008 rent expense 418 90000 20000 she cannot ded paid as the prepayment is greater than 1 year 41 No deduction all personal legal fees 42 Gross income 550000 Salaries 80000 Rent 24000 Utilities 7 telephone 9000 Interest 6000 Med insurance prem ofr employees 4000 Depreciation on equipment 12000 Net income 415000 An illegal drug operation can only deduct from gross income cost of goods sold 550000100000 450000 46 32000 of expenses regarding the possiblity of expanding the rest deductible regardless of whether or not the restaurant business is currently is in that business Total start up expenses for hotel 54000 less maximum allowed for deduction amount 50000 Excess over 50000 4000 Maximum amount to be elected to expense in start up year 5000 less excess over 50000 4000 Remainder to be expenses outright in startup yr 1000 First year expense election 1000 Remaining start up expenses 53000 Amortized over 15 years 180 mos 180 Start up expense per month 294 Months new hotel operated in start up year 2 588 total expense this year 1588 50 Less than 15 days you may exclude all of the rent the real estate mortgage interest would be itemized deductions from AGI 54 Sales 50000 Cost of goods sold 19000 Advertising 1000 Utilities 2000 Rent 4000 Insurance 1500 Wages 7000 AGI 15500 No chelsie cannot deduct the payment to Boyd it is a gift Chelsie cannot change her tax position however by giffting the Si and they use it to pay Boyd additional wages they would have an expense 55 In both cases the amount paid for goodwill and the amount alloca are amortized by Calvin over 15 years Loriann would treat the goc the covenant not to compete as ordinary income 57 Sale price of stock at FMV 60000 less basis of stock sold 65000 Realized loss on sale of stock 5000 Since the stock was sold to her brother a related party she is not recognize the loss on her tax return Sales price of stock by Ridge 75000 52000 less basis of stock sold 60000 60000 Realized gain loss 15000 8000 less disallowed loss from sister 5000 0 Recognized gain or loss 10000 8000 58 Isabelle Peter Sonya Reggie total Isabelle 26 19 15 25 85 Peter 26 19 0 0 45 Sonya 26 0 15 25 66 Reggie 26 0 15 25 66 Isabelle is cashbasis related taxpayer to robin corporation 60 Taxexempt income 40000 Taxable income 160000 total income 200000 Deductible interest total interest 15000 Taxable incometota 12000 61 a FROM b FROM c FOR d FROM 63 tmhm w 033 NOT FROM FOR FROM NOT FOR FROM FOR FOR NOT NOT SALARYJOHN SALARYM CD interest 5 corp income Award AGI less itemized deductions less exemptions 2 Taxable income Tl Total income tax less federal tax withheld Net refund due 94000 45000 4700 1200 2000 146900 25225 7000 114675 114675 65100 49575 025 12394 8963 21356 22200 844 rchase price legislation iether or not Ie motel are only p expenses of the motel reserve the tax deductions ge payments themselves setup and depreciated over time Id timing of interest reported investments is not I deductions Itions to First Church 3100 ate taxes 1900 e interest 6000 ome taxes 3700 mized deductions 14700 deduction amount computer Cash 76000 26000 2000 0 5400 4000 9750 28850 uct all of the rent taurant business are expanded because she taxes and the 000 to Velma and Clyde ther 1000 of deductible ated to a covenant not to compete dwill as a longterm capital gain and allowed to 64000 60000 4000 4000 0 Robin Corp Individual Expense Interest Income 2008 2009 2008 2009 0 2800 O 2800 2800 0 O 2800 II income 160000200000 FEDERAL INCOME TAX WH 22200 STATE INCOME TAX WH 6725 itemized deductions State income tax wh 6725 Charitable contributions 4400 State income tax paid 1200 Mortgage interest 9000 Real estate taxes 3900 total itemized deductions 25225
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