Questions from Individual Taxation

Q: Describe when economic performance occurs for the following expenses: Worker’s

Describe when economic performance occurs for the following expenses: Worker’s compensation, Rebates and refunds Insurance, warranties, and service contracts provided to the business Taxes

Q: On December 31 of the current year, a taxpayer prepays an

On December 31 of the current year, a taxpayer prepays an advertising company to provide advertising services for the next 10 months. Using the 12-month rule and the economic performance rules, contra...

Q: Compare and contrast how bad debt expense is determined for financial accounting

Compare and contrast how bad debt expense is determined for financial accounting purposes and how the deduction for bad debts is determined for accrual-method taxpayers. How do cash-method taxpayer’s...

Q: Describe the related-party limitation on accrued deductions. What tax

Describe the related-party limitation on accrued deductions. What tax savings strategy is this limitation designed to thwart?

Q: What are the relative advantages of the cash and accrual methods of

What are the relative advantages of the cash and accrual methods of accounting?

Q: What is a §481 adjustment and what is its purpose?

What is a §481 adjustment and what is its purpose?

Q: What is an “ordinary and necessary” business expenditure?

What is an “ordinary and necessary” business expenditure?

Q: Is cost of goods sold deductible as a business expense for a

Is cost of goods sold deductible as a business expense for a business selling inventory? Explain.

Q: Lauren is 17 years old. She reports earned income of $

Lauren is 17 years old. She reports earned income of $3,000 and unearned income of $2,200. Is she likely subject to the kiddie tax? Explain.

Q: Tom is an attorney who often represents individuals injured while working (

Tom is an attorney who often represents individuals injured while working (worker liability claims). This year -Tom spent $50 on a book entitled Plumbing For Dummies and paid $500 to take a course on...