Questions from Federal Taxation

Q: The taxpayer performs services with payment due from the customer within 30

The taxpayer performs services with payment due from the customer within 30 days. All customers pay within the time limit. What would be the benefit to the taxpayer using the cash method of accounting...

Q: The divorce agreement requires Alice to pay her former spouse $50

The divorce agreement requires Alice to pay her former spouse $50,000 a year for the next ten years. Will the payments qualify as alimony? Why or why not?

Q: For a person who receives Social Security benefits, what effect,

For a person who receives Social Security benefits, what effect, if any, can an increase in other income have on that person’s taxable income?

Q: Determine the taxpayer’s current-year (1) economic income and

Determine the taxpayer’s current-year (1) economic income and (2) gross income for tax purposes from the following events: a. Sam’s employment contract as chief executive of a large corporation was te...

Q: Harper is considering three alternative investments of $10,000.

Harper is considering three alternative investments of $10,000. Assume that the taxpayer is in the 25% marginal tax bracket for ordinary income and 15% for qualifying capital gains in all tax years. T...

Q: Determine the taxpayer’s gross income for tax purposes in each of the

Determine the taxpayer’s gross income for tax purposes in each of the following situations: a. Deb, a cash basis taxpayer, traded a corporate bond with accrued interest of $300 for corporate stock wi...

Q: Determine Amos’s gross income in each of the following cases:

Determine Amos’s gross income in each of the following cases: a. In the current year, Amos purchased an automobile for $25,000. As part of the transaction, Amos received a $1,500 rebate from the manuf...

Q: Al is a medical doctor who conducts his practice as a sole

Al is a medical doctor who conducts his practice as a sole proprietor. During 2017, he received cash of $280,000 for medical services. Of the amount collected, $40,000 was for services provided in 201...

Q: Selma operates a contractor’s supply store. She maintains her books using

Selma operates a contractor’s supply store. She maintains her books using the cash method. At the end of the year, her accountant computes her accrual basis income that is used on her tax return. For...

Q: The Adams Independent School District wants to sell a parcel of unimproved

The Adams Independent School District wants to sell a parcel of unimproved land that it does not need. Its three best offers are as follows: from the state’s Department of Public Safety (DPS), $2.3 mi...