Alex, a single taxpayer, has a salary of $100,000. He incurred & paid the following expenses during the year: Medical expenses $5000 Alimony $24,000 Charitable contribution $2000 Casualty loss (after $100 floor) $1000 Mortgage interest on personal residence $4500 State income taxes $4200 Mov ...continues
Sammy had the following for last year: Salary $40,000 Short-term Capital gain $3000 nonbusiness bad debt ($10,000) for the current year: salary $45000 nonbusiness bad debt ($1000) collection of last years bad debt $10,000 Calculate her AGI for the current year
Tax treatment for gambling winnings and losses for individuals
Joyce received a Form 1099 for her gambling winnings in the amount of $2100. Joyce is not a professional gambler. a. is the income subject to self employment tax? b. what type of income is it for tax reporting? c. can Joyce deduct any amounts against her gambling income? d. where would expense amounts be reported on a ...continues
Income tax rules regarding hobby losses
Dr. Giles is a dentist who deducted losses for her horse breeding activity for 15 years. In 14 of the 15 years, she sustained a loss for tax reporting purposes. As a result of an audit, she took the IRS to task in Tax Court in 2006. She lost her case because she did not satisfactorily demonstrate the activity was a viable bus ...continues
Tax Questions about Individual Tax Deductions
53) Chee, single, age 40, had the following income and expenses during the year (not a leap year): Income: Salary .. $43,000 Rental of vacation home (rented 60 days, used Personally 60 days, vacant 245 days) . $4,000 Municipal bond interest .. $2,000 Divid ...continues
What are the relevant tax issues that Celine faces in making her decision?
Celine is going to be subject to the AMT in 2005. She owns an investment building and is considering disposing of it and investing in other realty. Based on an appraisal of the buildings value, the realized gain would be $85,000. Ed has offered to purchase the building from Celine with the closing date being December 29, 2005. ...continues
Substance over form and tax planning
1. What does substance over form mean? How would this doctrine be applied in a tax controversy? 2. For most businesses, does the time and money spent in tax planning pass the cost vs. benefit test? In other words, how valuable is tax planning? Can you think of an example of planning for a small business in the formation stage ...continues
1.A client asks your advice on the following situation. They are going to start a manufacturing company with two outside investors. The investors will be not be employees; your client will be a full-time employee and CEO. They want to know what form of business you recommend the company be. Compare the pros and cons of each busi ...continues
(1) Your client is a new partnership, Aspen Associates, which is an engineering consulting firm. Generally, Aspen bills clients for services at the end of each month. Client billing are about $50,000 each month. On average, it takes 45 days to collect the receivables Aspens expenses are primarily for salary and rent. Salaries ...continues
This year, Mrs. Kuratas corporate employer made a $8,300 cash contribution to her retirement savings plan. Her interest in the plan is fully vested, so she has the legal right to withdraw the contribution at any time. Describe the tax consequences of the contribution to Mrs. Kurata and to the corporate employer assuming the fol ...continues
