Taxation Question

What makes the disposition of an asset a “capital gain” or “capital loss” instead of an ordinary gain or loss? Why do you think the distinction was written into the tax code? Why the distinction between long and short term?

Response to question about practical inductive argument and fallacies.

A good, practical inductive argument is based on repeated, accurate observations. Taken to the extreme it might be what fallacy? Which one? Can this be avoided? How?

Gains and Losses: calculations of Sec 1231 gains/losses, and capital gains and losses

See attached file for full problem description.

Qualified Residence Interest

Income Tax Accounting. See attached problem 17-46 regarding qualified residence interest

Realized Gain or Loss

See attached file for full problem description.

Recognized gain or loss

Income Tax Accounting. Recognized gain or loss. See attached file for full problem description.

Combined Depreciation

6. Answer_____________ Michelle has an advertising business that she reports on Schedule C of her personal tax return. On May 1, 2006, Michelle purchased a Toyota Camry for $22,000. She purchased a copier for $30,000 on October 15th and office furniture for $50,000 on November 1st. All assets acquired are new. The Camry is used ...continues

Deductible Amounts

7. Answer_____________ Gayle owns a successful consulting business with over 100 employees. Her business has the following meals and entertainment related expenses this year: $16,000 for meals and $12,000 for entertainment directly related to the active conduct of business, $10,000 for the annual holiday party and $2,000 for Sup ...continues

Itemized deductions: which interest paid is deductible

8. Sharon sold her home on February 14th and purchased a new home one month later. The home cost $900,000 and was funded by obtaining an interest only mortgage from Chase for $900,000. She paid $9,000 of points to Chase to obtain this mortgage. On July 1st she refinanced the loan with Bank of America to obtain a lower interest r ...continues

AGI and partnerships: calculate Teresa's AGI

9. Teresa, an attorney, earns $300,000 from her practice. During the year, she paid $50,000 to acquire a 20% interest in a partnership that produces a $200,000 loss ($40,000 distributive share to Teresa). She also receives $35,000 in interest and dividends on other investments. What is Teresa’s AGI if she is a material participa ...continues