How much can Fred deduct in 2004 and 2005?
33. In 2004, Fred invested $50,000 in a general partnership. Fred’s interest is not considered to be a passive activity. His share of the partnership losses was $35,000 in 2004 and $25,000 in 2005. How much can Fred deduct in 2004 and 2005?
If the activity is a bakery and Ray is not a material participant, what is his AGI?
40. Ray acquired an activity several years ago, and in 2005, it generated a loss of $50,000. Ray has AGI of $140,000 before considering the loss from the activity. If the activity is a bakery and Ray is not a material participant, what is his AGI?
Use the following data to calculate Reba’s AMT base in 2005
31. Use the following data to calculate Reba’s AMT base in 2005: Taxable income $190,000 Positive AMT adjustments 95,000 Negative AMT adjustments 85,000 AMT preferences 28,000 Reba will file as a head of household.
Compute their tentative minimum tax
56. Rosa and Steve, who are married, had taxable income of $225,000 for 2005. They had positive AMT adjustments of $40,000, negative AMT adjustments of $10,000, and tax preference items of $67,500. a. Compute their AMTI. b. Compute their tentative minimum tax.
The Cardinal Wholesale Company: Tax calculation/S corporation
The Cardinal Wholesale Company is an S corporation that began business on March 1, 2005. Robert, a calendar year taxpayer, owns 100% of the Cardinal stock. He has $400,000 taxable income from other sources each year. Robert will work approximately 30 hours a week for the corporation. Cardinal sells swimming pool supplies, and it ...continues
Calculate Mauve’s tax liability for the short period October 1, 2004, through January 31, 2005.
30. Mauve Corporation began operations as a farm supplies business and used a fiscal year ending September 30. The company gradually went out of the farm supplies business and into the mail-order Christmas gifts business. The company has received permission from the IRS to change to a fiscal year ending January 31, effective for ...continues
What accounting method (cash or accrual) would you recommend for the following businesses?
34. What accounting method (cash or accrual) would you recommend for the following businesses? a. An incorporated medical practice with annual gross receipts of $12 million. b. A hardware store with annual gross receipts of less than $1 million. c. A building contractor, who builds single-family houses, with annual gross re ...continues
Zack conducted his professional practice through Zack, Inc.
29. Zack conducted his professional practice through Zack, Inc. The corporation uses a fiscal year ending September 30 even though the business purpose test for a fiscal year cannot be satisfied. For the year ending September 30, 2005, the corporation paid Zack a salary of $180,000, and during the period January through Septembe ...continues
Do you think social security benefits should be taxable? Why or why not? (Note – these benefits CAN be taxable and can be taxed as high as 85%).
Do you think dividend income should be taxable? Why or why not?
