Questions from Federal Taxation

Q: Compare the cash and accrual methods of accounting for the following events

Compare the cash and accrual methods of accounting for the following events: a. Purchased new equipment, paying $50,000 cash and giving a note payable for $30,000 due next year. b. Paid $3,600 for a t...

Q: Emerald Motors is an automobile dealer. The controller consults with you

Emerald Motors is an automobile dealer. The controller consults with you about the type of accounting used for a special offer to its new car customers. Emerald has offered to provide at no charge to...

Q: Irene has made Sara an offer on the purchase of a capital

Irene has made Sara an offer on the purchase of a capital asset. Irene will pay (1) $200,000 cash or (2) $50,000 cash and a 6% installment note for $150,000 guaranteed by City Bank of New York. If Sar...

Q: Evan is single and has AGI of $277,300 in

Evan is single and has AGI of $277,300 in 2017. His potential itemized deductions before any limitations for the year total $52,300 and consist of the following: Medical expenses (before the 10%-of-A...

Q: Arnold gave land to his son, Bruce. Arnold’s basis in

Arnold gave land to his son, Bruce. Arnold’s basis in the land was $100,000, and its fair market value at the date of the gift was $150,000. Bruce borrowed $130,000 from a bank that he used to improve...

Q: On June 1, 2015, Father sold land to Son for

On June 1, 2015, Father sold land to Son for $300,000. Father reported the gain by the installment method, with the gain to be spread over five years. In May 2017, Son received an offer of $400,000 fo...

Q: What are the similarities between the crop method used for farming and

What are the similarities between the crop method used for farming and the completed contract method used for long-term construction?

Q: William, a high school teacher, earns about $50,

William, a high school teacher, earns about $50,000 each year. In December 2017, he won $1 million in the state lottery. William plans to donate $100,000 to his church. He has asked you, his tax advis...

Q: Assume that a partnership is profitable and that its tax year ends

Assume that a partnership is profitable and that its tax year ends on December 31 but one of the partners’ tax year ends on September 30. Does the partner enjoy a tax benefit or detriment from the par...

Q: Rafael and Lucy Gonzalez, married taxpayers, each contribute $2

Rafael and Lucy Gonzalez, married taxpayers, each contribute $2,900 to their respective § 401(k) plans in 2017. The AGI reported on their joint return is $38,000. Determine the amount of the couple’s...