Questions from Federal Taxation

Q: Pharm Inc. is a small pharmaceutical company (organized four years

Pharm Inc. is a small pharmaceutical company (organized four years ago) that is heavily involved in drug research. During the current year, Pharm Inc. incurred the following expenditures related to th...

Q: Carolyn is unmarried and has one dependent child, age 6,

Carolyn is unmarried and has one dependent child, age 6, who lived with her for the entire year. In 2017, she has income of $16,000 in wages and $6,000 in alimony. Her AGI is $22,000. a. What is Caro...

Q: Jose is unmarried with no qualifying children. He has $8

Jose is unmarried with no qualifying children. He has $8,300 of 2017 wages and is otherwise eligible for the earned income credit. Jose has $200 of interest income and no for AGI deductions. a. What...

Q: Under a divorce agreement executed in the current year, an ex

Under a divorce agreement executed in the current year, an ex-wife receives from her former husband cash of $25,000 per year for eight years. The agreement does not explicitly state that the payments...

Q: Latisha is an unmarried taxpayer, filing head of household. She

Latisha is an unmarried taxpayer, filing head of household. She has two dependent children (7-year-old twins) who lived with her all year. Her 2017 earned income was $18,600, her AGI was $22,700, and...

Q: Lake Corporation has severe cash-flow problems. You are the

Lake Corporation has severe cash-flow problems. You are the company’s financial and tax consultant. The treasurer of the company informed you that the company has failed to make FICA and federal incom...

Q: Barry is a college student who is employed as a waiter during

Barry is a college student who is employed as a waiter during the summer. He earns approximately $1,500 during the summer and estimates that he will not be required to file a tax return and will have...

Q: Bart and Jane Lee are married, file a joint return and

Bart and Jane Lee are married, file a joint return and have two dependent children (twins, age 9). Bart begins a new job and is asked to fill out a Form W-4. His monthly gross earnings will be $3,200....

Q: Anna does not make quarterly estimated tax payments even though she has

Anna does not make quarterly estimated tax payments even though she has substantial amounts of income that are not subject to withholding. In the previous year, Anna’s tax liability was $18,000 and he...

Q: Lean Corporation was incorporated in 2011 by Bruce Smith, who has

Lean Corporation was incorporated in 2011 by Bruce Smith, who has served as an officer and member of the Board of Directors. Carl Jones has served as the secretary-treasurer of the company as a conven...