Questions from Federal Taxation

Q: For each of the following, determine the amount that should be

For each of the following, determine the amount that should be included in gross income: a. Peyton was selected the most valuable player in the Super Bowl. In recognition of this, he was awarded an au...

Q: In the following independent situations, is the tax position of the

In the following independent situations, is the tax position of the taxpayer likely to change? Explain why or why not. a. John started renting out a spare room in his home. b. Theresa quit her job as...

Q: The commissioners for Walker County are actively negotiating with Falcon Industries regarding

The commissioners for Walker County are actively negotiating with Falcon Industries regarding the location of a new manufacturing plant in the area. As Falcon is considering several other sites, a “ge...

Q: The LMN Partnership has a group term life insurance plan. Each

The LMN Partnership has a group term life insurance plan. Each partner has $150,000 of protection, and each employee has protection equal to twice his or her annual salary. Employee Alice (age 32) has...

Q: Herbert was employed for the first six months of 2017 and earned

Herbert was employed for the first six months of 2017 and earned $90,000 in salary. During the next six months, he collected $8,800 of unemployment compensation, borrowed $12,000 (using his personal r...

Q: Linda and Don are married and file a joint return. In

Linda and Don are married and file a joint return. In 2017, they received $12,000 in Social Security benefits and $35,000 in taxable pension benefits and interest. a. Compute the couple’s adjusted gro...

Q: Charles E. Bennett, age 64, will retire next year

Charles E. Bennett, age 64, will retire next year and is trying to decide whether to begin collecting his Social Security benefits at that time. His monthly benefits will increase if he defers his sta...

Q: Your client owns a life insurance policy on his life. He

Your client owns a life insurance policy on his life. He has paid $6,800 in premiums, and the cash surrender value of the policy is $30,000. He borrowed $30,000 from the insurance company, using the c...

Q: Tranquility Funeral Home, Inc., your client, is an accrual

Tranquility Funeral Home, Inc., your client, is an accrual basis taxpayer that sells preneed funeral contracts. Under these contracts, the customer pays in advance for goods and services to be provide...

Q: Your client was the beneficiary of an annuity contract purchased by her

Your client was the beneficiary of an annuity contract purchased by her stepmother. When the stepmother died, the insurance company paid the client $400,000 and sent her a Form 1099 indicating that th...