Angela, who is single, incurs circulation expenditures of $270,000 during 2021. She is deciding whether to deduct the entire $270,000 or to capitalize the expenses and deduct them over a three-year period. Angela is in the 37% bracket for regular tax purposes this year; she reports regular taxable income of $1,200,000 before considering the circulation expenses and has no AMT adjustments other than the circulation expenditures. Angela expects to be in the highest regular tax bracket in 2022 and 2023 as well. Advise Angela on how to treat the expenditures in 2021. Take the time value of money into consideration when calculating the tax savings of one alternative over another. Use the tables in Appendix E for this purpose, and assume that the pertinent discount rate is 4%.
> Beth R. Jordan lives at 2322 Skyview Road, Mesa, AZ 85201. She is a tax accountant with Mesa Manufacturing Company, 1203 Western Avenue, Mesa, AZ 85201 (employer identification number 11-1111111). She also writes computer software programs for tax practi
> Paul and Donna Decker are married taxpayers, ages 44 and 42, respectively, who file a joint return for 2021. The Deckers live at 1121 College Avenue, Carmel, IN 46032. Paul is an assistant manager at Carmel Motor Inn, and Donna is a teacher at Carmel Ele
> Alice J. and Bruce M. Byrd are married taxpayers who file a joint return. Their Social Security numbers are 123-45-6784 and 111-11-1113, respectively. Alice’s birthday is September 21, 1973, and Bruce’s is June 27, 197
> John Benson, age 40, is single. His Social Security number is 111-11-1111, and he resides at 150 Highway 51, Tangipahoa, LA 70465. John has a 7-year-old child, Kendra, who lives with her mother, Katy. As a result of his divorce in 2016, John pays alimony
> Alton Newman, age 67, is married and files a joint return with his wife, Clair, age 65. Alton and Clair are both retired, and during 2020, they received Social Security benefits of $10,000. Both Alton and Clair are covered by Medicare. Alton’s Social Sec
> Jacob, age 42, and Jane Brewster, age 44, are married and file a joint return in 2021. The Brewsters have two dependent children, Lukas and Alexa, 14-year-old twins. Unless otherwise noted, all of the income and expense amounts in the problem relate to t
> William, a high school teacher, earns about $50,000 each year. In December 2021, he won $1,000,000 in the state lottery. William plans to donate $100,000 to his church. He has asked you, his tax adviser, whether he should donate the $100,000 in 2021 or 2
> Robert A. Kliesh, age 41, is single and has no dependents. Robert’s Social Security number is 111-11-1115. His address is 727 Big Horn Avenue, Sheridan, WY 82801. He does not contribute to the Presidential Election Campaign fund through the Form 1040. Ro
> Tim and Sarah Lawrence are married and file a joint return. Tim’s Social Security number is 123-45-6789, and Sarah’s Social Security number is 111-11-1111. They reside at 100 Olive Lane, Covington, LA 70434. They have two dependent children, Sean and Deb
> Betty is age 34 and has AGI of $50,000 and regular taxable income of $35,000. The following items may qualify as itemized deductions for Betty: Qualified medical expenses (before percentage of AGI floor) ……………………..$3,000 Real estate tax ……………………………………………
> Betty is age 34 and has AGI of $50,000. The following items may qualify as itemized deductions for Betty: Qualified medical expenses (before 7.5% AGI floor) ………………………….$6,000 Real estate tax ………………………………………………………………………………….1,200 State income tax ……………………
> Which of the following may not be claimed as a deduction by a taxpayer who claims the standard deduction? a. Interest penalty on early withdrawal of savings b. Self-employed health insurance c. State income tax paid d. IRA contribution
> Sally recently invested $10,000 (tax basis) in a limited partnership interest. Her atrisk amount is also $10,000. The partnership lost $6,000 this year, and Sally’s share of the loss is $2,000. Sally has $40,000 in wage income and $2,000 of dividend inco
> In early year 8, Alice sold Tom, her son, 20 shares of common stock for $20,000. Alice had paid $25,000 for the stock in year 2. In late year 8, Tom sold the stock to an unrelated third party for $35,000. How much gain must Tom report in his year 8 tax r
> On January 25, year 10, Mother Hall gave her daughter, Nadyne, 500 shares of common stock of XYZ, Corp. The fair market value of the stock on January 25 was $2,000. Mother Hall had paid $4,000 for the stock three years earlier. Nadyne decided a month aft
> On February 1 of the current year, Duffy learned that he was bequeathed 1,000 shares of common stock under his father’s will. Duffy’s father had paid $12,500 for the stock 20 years ago. Fair market value of the stock on February 1 of the current year, th
> Madison and Nick Koz have two children, ages 8 and 10. Both children meet the definition of qualifying child. The Koz family has adjusted gross income of $300,000. What is the amount of the child tax credit on the couple’s income tax return? a. $1,000 b.
> Matt, who is single, always has elected to itemize deductions rather than take the standard deduction. In prior years, his itemized deductions always exceeded the standard deduction by a substantial amount. Based on recent tax law changes and the fact th
> On March 5, 2016, the Hortons borrowed $100,000 against the equity in their personal residence with the loan secured by that home. For 2016 and 2017, they were able to deduct the interest expense on this loan as home equity interest expense [an itemized
> Marcia, a shareholder in a corporation with stores in five states, donated stock with a basis of $10,000 to a qualified charitable organization in 2020. Although the stock of the corporation was not traded on a public stock exchange, many shares had been
> On his 2020 Federal income tax return, Rigved deducted state income taxes of $8,000 for amounts withheld and estimated tax payments made in 2020. When he filed his 2020 state income tax return in April 2021, he discovered that he had overpaid his state i
> Many see the “step-up in basis at death” rule as an expensive tax loophole enjoyed by the wealthy. Find the latest estimates of the revenue loss to the Treasury that is attributable to this rule. a. How does Canada’s tax law determine the basis of proper
> How are transactions using bitcoin (or another virtual currency) treated under U.S. tax law? Locate the current IRS guidance on this question. Some background on bitcoin can be found at bitcoin.org/en/faq. In addition, locate the American Institute of CP
> Ruth Ames died on January 10, 2021. In filing the estate tax return, her executor, Melvin Sims, elects the primary valuation date and amount (fair market value on the date of death). On March 12, 2021, Melvin invests $30,000 of cash that Ruth had in her
> Taxpayers who purchase health insurance coverage through the Health Insurance Marketplace may be eligible for the premium tax credit under § 36B. Use the IRS website to determine which taxpayers are eligible for the credit. Send a one-page summary of you
> What would you expect the relationship to be between a taxpayer’s AGI and AMT liability? Find Figure D in Section 3 (Individual Tax Rates) of the 2015–2018 editions of IRS Publication 1304, Individual Income Tax Returns Complete Report. Use the informati
> Use the IRS’s Statistics of Income page to determine how many individual income tax returns reported an AMT liability from 2013 to 2018. What percentage of returns filed in this time period report an AMT liability? What percentage of tax revenues collect
> The TCJA of 2017 repealed the corporate AMT provisions. However, any unused AMT credits a corporation had at that point in time were allowed to be used over four tax years, beginning in 2018. The 2020 Coronavirus Aid Relief and Economic Security Act (CAR
> Robin inherits 1,000 shares of Walmart stock from her aunt Julieta in 2021. According to the information received from the executor of Julieta’s estate, Robin’s adjusted basis for the stock is $55,000. Albert, Robin’s fiancé, receives 1,000 shares of Wal
> Investment interest is incurred when taxpayers borrow money that is used to purchase investment property. Using IRS Tax Statistics for the most recent year available (www.irs.gov/statistics), determine (a) the number of taxpayers who claimed a deduction
> Oil and gas ventures operating as publicly traded partnerships typically attract sophisticated investors who purchase limited partnership interests. Investments in these types of publicly traded partnerships are subject to a restrictive set of passive ac
> Since the first bitcoin transaction in 2009, the number of virtual currencies has grown to over 1,500 and some taxpayers trade the currencies multiple times each day (i.e., like a day trader). Find a reliable article on investment strategies for virtual
> Look for reliable data on how many individuals are affected by the $10,000 SALT cap. Use that data to make an argument for or against the cap.
> The Federal government incurs a cost for every item that is deductible in the computation of taxable income. These costs, which take the form of forgone tax revenue, are often referred to as “tax expenditures.” The Joint Committee on Taxation regularly e
> During 2021, Susan incurred and paid the following expenses for Beth (her daughter), Ed (her father), and herself: Surgery for Beth ………………………………………………………………..$4,500 Red River Academy charges for Beth: Tuition ………………………………………………………………………………..5,100 Room, b
> Arthur Wesson, an unmarried individual who is age 58, reports taxable income of $510,000 in 2021. He records positive AMT adjustments of $80,000 and preferences of $35,000. Arthur itemizes his deductions, and his regular tax liability in 2021 is $153,044
> Paul suffers from emphysema and severe allergies and, upon the recommendation of his physician, has a dust elimination system installed in his personal residence. In connection with the system, Paul incurs and pays the following amounts during 2021: Doct
> Emma Doyle is employed as a corporate attorney. For calendar year 2021, she had AGI of $75,000 and paid the following medical expenses: Medical insurance premiums ……………………………………………………………….$3,700 Doctor and dentist bills for Bob and April (Emma’s parents)
> Linda, who files as a single taxpayer, had AGI of $280,000 for 2021. She incurred the following expenses and losses during the year: Medical expenses (before the 7.5%-of-AGI limitation) ………………………………..$33,000 State and local income taxes ……………………………………………
> Paola exercised an incentive stock option on March 1, 2021. She acquired 2,000 shares of stock at an exercise price of $3 per share when the fair market value of the stock was $15 per share. However, Paola was concerned that the stock was overvalued, so
> Evan is single and has AGI of $277,300 in 2021. His potential itemized deductions before any limitations for the year total $52,300 and consist of the following: Medical expenses (before the 7.5%-of-AGI limitation) ………………………………..$31,000 Interest on home
> Bart and Elizabeth Forrest are married and have no dependents. They have asked you to advise them whether they should file jointly or separately in 2021. Bart incurred some significant medical expenses during the year related to an unexpected surgery. Th
> Heather wants to invest $40,000 in a relatively safe venture and has discovered two alternatives that would produce the following reportable ordinary income and loss over the next three years: She is interested in the after-tax effects of these alternati
> On December 27, 2021, Roberta purchased four tickets to a charity ball sponsored by the city of San Diego for the benefit of underprivileged children. Each ticket cost $200 and had a fair market value of $35. On the same day as the purchase, Roberta gave
> Ramon had AGI of $180,000 in 2022. He is considering making a charitable contribution this year to the American Heart Association, a qualified charitable organization. Determine the current allowable charitable contribution deduction in each of the follo
> Liz had AGI of $130,000 in 2021. She donated Bluebird Corporation stock with a basis of $10,000 to a qualified charitable organization on July 5, 2021. a. What is the amount of Liz’s deduction assuming that she purchased the stock on December 3, 2020, an
> In 2021, Geoff incurred $900,000 of mine and exploration expenditures. He elects to deduct the expenditures as quickly as the tax law allows for regular tax purposes. a. How will Geoff’s treatment of mine and exploration expenditures affect his regular t
> In March 2021, Helen Carlon acquired used equipment for her business at a cost of $300,000. The equipment is five-year property for regular tax depreciation purposes. a. If Helen depreciates the equipment using the method that will produce the greatest d
> Nichole, who is single and uses the cash method of accounting, lives in a state that imposes an income tax. In April 2021, she files her state income tax return for 2020 and pays an additional $1,000 in state income taxes. During 2021, her withholdings f
> In 2007, Malik purchased an office building for $500,000 to be used in his business. He sells the building in the current tax year. Explain whether his recognized gain or loss for regular tax purposes will be different from his recognized gain or loss fo
> Jaimee and Mike live in Austin, Texas. They married early in January 2020. They had saved a significant amount of money for their wedding, but instead decided to elope. The couple used the money they had saved for the wedding to buy some vacant, unimprov
> Perform the indicated operation.
> Express each terminating decimal number as a quotient of two integers. If possible, reduce the quotient to lowest terms. 0.2345
> Perform the indicated operation without the use of a calculator and express each answer in decimal notation. (b) Confirm your answer from part (a) by using a scientific calculator to perform the operations. If the calculator displays the answer in scient
> Find (a) the greatest common divisor (GCD) and (b) the least common multiple (LCM). 32 and 224
> Perform the indicated operation.
> Express each terminating decimal number as a quotient of two integers. If possible, reduce the quotient to lowest terms. 0.251
> Perform the indicated operation without the use of a calculator and express each answer in decimal notation. (b) Confirm your answer from part (a) by using a scientific calculator to perform the operations. If the calculator displays the answer in scient
> Find (a) the greatest common divisor (GCD) and (b) the least common multiple (LCM). 12 and 21
> Perform the indicated operation.
> Express each terminating decimal number as a quotient of two integers. If possible, reduce the quotient to lowest terms. 0.375
> 2. If a is a factor of b, then b, a is a(n) _________. 4. A natural number greater than 1 that has exactly two factors, itself and 1, is known as a(n) _________ number. 6. The largest natural number that divides (without remainder) each number in a set o
> Perform the indicated operation without the use of a calculator and express each answer in decimal notation. (b) Confirm your answer from part (a) by using a scientific calculator to perform the operations. If the calculator displays the answer in scient
> Find the prime factorization of the number. 3190
> Simplify the radical.
> Express each terminating decimal number as a quotient of two integers. If possible, reduce the quotient to lowest terms. 0.13
> Perform the indicated operation without the use of a calculator and express each answer in decimal notation. (b) Confirm your answer from part (a) by using a scientific calculator to perform the operations. If the calculator displays the answer in scient
> Find the prime factorization of the number. 663
> Simplify the radical.
> Express each rational number as terminating or repeating decimal number.
> Express the number in decimal notation. 4.6×101
> Find the prime factorization of the number. 399
> 2. A symbol that represents a specific quantity is called a(n)______. 4. The number or numbers that replace the variable to make an equation a true statement is called ________the to the equation. 6. Terms that have the same variables with the same expon
> Simplify the radical.
> Express each rational number as terminating or repeating decimal number.
> Express the number in decimal notation. 2.19 ×10-4
> Find the prime factorization of the number. 315
> Simplify the radical.
> Express each rational number as terminating or repeating decimal number.
> Express the number in decimal notation. 4.07 × 10-3
> Find the prime factorization of the number. 98
> Classify the number as a member of one or more of the following sets: the rational numbers, the integers, the natural numbers, the irrational numbers. 0.123112311123……
> Express each rational number as terminating or repeating decimal number.
> 2. The symbol ( is called the ___________ sign. 4. In the radical expression 3(5, the 3 is called the _______________ of the radical expression. 6. Any number that is the square of a natural number is called a(n) _________ square. 8. Consider the irrati
> Express the number in decimal notation. 5.3 × 104
> Determine whether the number is divisible by each of the following numbers: 2, 3, 4, 5, 6, 8, 9, and 10. Determine a number that is divisible by 3, 4, 5, 9, and 10.
> Classify the number as a member of one or more of the following sets: the rational numbers, the integers, the natural numbers, the irrational numbers. 0.123123123
> Convert each improper fraction to a mixed number.
> Express the number in scientific notation. 0.0003
> Determine whether the number is divisible by each of the following numbers: 2, 3, 4, 5, 6, 8, 9, and 10. 3,941,221
> Classify the number as a member of one or more of the following sets: the rational numbers, the integers, the natural numbers, the irrational numbers. 2.718
> Convert each improper fraction to a mixed number.
> Express the number in scientific notation. 1,260,000,000
> Determine whether the number is divisible by each of the following numbers: 2, 3, 4, 5, 6, 8, 9, and 10. 170,820
> 2. With the quotient rule for exponents, the expression can be simplified to ________. 4. With the negative exponent rule, for x ≠0, the expression x-5 can be simplified to ________. 6. A number written in scientific notation is a num
> Classify the number as a member of one or more of the following sets: the rational numbers, the integers, the natural numbers, the irrational numbers.
> Convert each improper fraction to a mixed number.
> Express the number in scientific notation. 0.00467
> Determine whether the number is divisible by each of the following numbers: 2, 3, 4, 5, 6, 8, 9, and 10. 23,800
> Classify the number as a member of one or more of the following sets: the rational numbers, the integers, the natural numbers, the irrational numbers. -5
