Questions from Federal Taxation

Q: Serena operates a gift shop. To reduce costs of credit card

Serena operates a gift shop. To reduce costs of credit card transactions, she offers customers a discount if they pay in cash. For the holiday rush, she hires some short-term workers, but pays them ca...

Q: Rebecca sells her personal scooter for $550. She purchased the

Rebecca sells her personal scooter for $550. She purchased the scooter for $700 three years ago. In addition, Rebecca sells a painting for $1,200 that she acquired five years ago for $900. What are th...

Q: With regard to the IRS audit process, comment on the following

With regard to the IRS audit process, comment on the following: a. The audit is resolved by mail. b. The audit is conducted at the office of the IRS. c. A “no change” RAR results. d. A special agent j...

Q: How does the tax benefit rule apply in the following cases?

How does the tax benefit rule apply in the following cases? a. In 2015, the Orange Furniture Store, an accrual method taxpayer, sold furniture on credit for $1,000 to Sammy. The cost of the furniture...

Q: Determine the net effect on Tamara’s adjusted gross income with regard to

Determine the net effect on Tamara’s adjusted gross income with regard to these capital asset transactions that occurred this year. • Sold ABCCo stock, acquired 2 years ago, for a $1,500 loss. • Sold...

Q: Aldo has just been audited by the IRS. He does not

Aldo has just been audited by the IRS. He does not agree with the agent’s findings but believes that he has only two choices: pay the proposed deficiency or resort to the courts. Do you agree with Ald...

Q: Sam and Abby are dependents of their parents, and each earns

Sam and Abby are dependents of their parents, and each earns gross income of $2,100 for the year. Sam’s standard deduction for the year is $1,050, while Abby’s is $2,450. As their income is the same,...

Q: What purpose is served by a statute of limitations? How is

What purpose is served by a statute of limitations? How is it relevant in the case of tax controversies?

Q: During the year, Addison is involved in the following transactions.

During the year, Addison is involved in the following transactions. What are the possible Federal income tax effects of these transactions? a. Lost money gambling on a trip to a casino. b. Helped pay...

Q: Regarding the statute of limitations on additional assessments of tax by the

Regarding the statute of limitations on additional assessments of tax by the IRS, determine the applicable period in each of the following situations. Assume a calendar year individual with no fraud o...