Capital gain transactions for business entities and taxability of distributions from flow through entities

A. Jeff is the sole shareholder of a C corporation. In 2006, the corp sold a capital asset for a gain of $20000. Jeff is required to report the capital gain on his individual income tax return for 2006 & the gain is subject to a maximum rate of 15%. B. Ramon owns a 30% interest in a partnership that earned $100000 in the cu ...continues

High-Income Bracket calculations and explanations

High-income bracket. The expression 90,514.5 +(plus) 0.35(x - (minus) 311,950) represents the amount for the 2003 federal income tax in dollars for a single taxpayer with x dollars of taxable income, where x is over $311,950 (www.irs.gov). a) Simplify the expression. b) Use the graph in the accompanying figure to estimate ...continues

Tracing rules for loan proceeds & land developer gain. Is interest expense deductible? What is the amount of the gain?

Case 1: A lawyer withdraws his entire capital account from his law firm and uses the funds to finance the purchase of a home in which he resides. On the same day, the lawyer borrows an equivalent amount of funds by way of bank loan and deposits the funds to his law firm. Issue: Is the interest expense on the bank loan de ...continues

Short Summary of AICPA Statements on Standards for Tax Service

Need a summary of the AICPA Statements on Standards for Tax Service. No specific format-just a summary of the main points.

Tax problems for depreciation, exchanges and gain calculations for Section 1245 and Section 1250 property

Bonnie purchased a new business asset (5-year property) on 03/10/06, at a cost of $20,000. She also purchased a new business asset (7-year property) on 11/20/06 at a cost of $13,000. Bonnie did not elect straight-line recovery. Determine the cost recovery deduction for 2006 these assets? David owns a warehouse that is used in ...continues

Taxable Income problem

Janet, (single) has the following items for 2006: salary $140000 Home mortgage interest $10,000 A hurricane completely destroyed her duplex during the current year. She lived in half of the duplex & rented the other half. She paid $400,000 for the duplex & has taken $80,000 of cost recovery on the rental portion. It was w ...continues

Charitable contribution problem

Kelly has AGI of $100,000 in 2006. She contributes stock in Tulip Corp. (a publicly traded corp.) to a State University (a qualified charitable org.) The stock is worth $59000 & she acquired it as an investment 2 years ago at a cost of $44,000. 1. What is the total amount that kelly can deduct as a charitable contribution, as ...continues

Itemized deductions - limitations on certain types of deductions

For 2006, Jon & Betty Smith file a joint return with AGI of $240,000. Their itemized deductions are the following: Medical expenses before AGI floor $23000 Casualty loss (not covered by insurance) before statutory floors $26,000 Interest on home mortgage $10,000 Interest on credit cards $800 Property taxes on home $13,000 ...continues

Itemized Deductions Limitations

Bob, who is single had AGI of $400,000 in 2006. He incurred the following expenses & losses during the year. Medical expenses before 7.5% of AGI limitation $39,500 State & local income taxes $5,200 Real Estate taxes $4,400 Home mortgage interest ...continues

Deductions for AGI

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