Questions from Federal Taxation

Q: Patsy maintains a household that includes her eldest son (age 30

Patsy maintains a household that includes her eldest son (age 30) and one of Patsy’s cousins (age 28). She can claim the cousin as a dependent but not her son. Explain.

Q: Discuss the probable justification for each of the following aspects of the

Discuss the probable justification for each of the following aspects of the tax law: a. A tax credit is allowed for amounts spent to furnish care for minor children while the parent works. b. Deductio...

Q: Heather, age 12, lives in the same household with her

Heather, age 12, lives in the same household with her mother, grandmother, and uncle. a. Who can claim Heather as a dependent on a Federal income tax return? b. Which of Heather’s relatives takes prec...

Q: Mia owns a warehouse that has a cost basis to her of

Mia owns a warehouse that has a cost basis to her of $80,000. The city condemns the warehouse to make room for a new fire station. It pays Mia $400,000 for the property, its agreed-to fair market valu...

Q: Caden and Lily are divorced on March 3, 2016. For

Caden and Lily are divorced on March 3, 2016. For financial reasons, however, Lily continues to live in Caden’s apartment and receives her support from him. Caden does not claim Lily as a dependent on...

Q: Belinda spent the last 60 days of 2017 in a nursing home

Belinda spent the last 60 days of 2017 in a nursing home. The cost of the services provided to her was $18,000 ($300 per day). Medicare paid $8,500 toward the cost of her stay. Belinda also received $...

Q: Aubrey Brown is a decorated veteran of the Vietnam War. As

Aubrey Brown is a decorated veteran of the Vietnam War. As a result of his exposure to Agent Orange during the war, Aubrey developed lung cancer and is unable to work. He received $12,000 of Social Se...

Q: Murray reported to the Environmental Protection Agency that his employer was illegally

Murray reported to the Environmental Protection Agency that his employer was illegally dumping chemicals into a river. His charges were true, and Murray’s employer was fined. In retaliation, Murray’s...

Q: Your client, John Butler, is an avid Houston Astros fan

Your client, John Butler, is an avid Houston Astros fan. Last March at the Astros’ home opener, as a result of a random drawing of those in attendance at the game, John won 300 Shipley Do-Nut coupons....

Q: Bluebird, Inc., does not provide its employees with any tax

Bluebird, Inc., does not provide its employees with any tax-exempt fringe benefits. The company is considering adopting a hospital and medical benefits insurance plan that will cost approximately $9,0...