Questions from Federal Taxation

Q: The IRS audits Pearl’s current year individual return and determines that,

The IRS audits Pearl’s current year individual return and determines that, among other errors, she negligently failed to report dividend income of $8,000. The deficiency relating to the dividends is $...

Q: Refer to Part c of the previous problem. Assume that Carmen

Refer to Part c of the previous problem. Assume that Carmen discloses her position, which is not frivolous. How would your original answer change assuming the item does not involve a tax shelter? From...

Q: Luis, a bachelor, owes $56,000 of additional

Luis, a bachelor, owes $56,000 of additional taxes, all due to fraud. a. What is the amount of Luis’ civil fraud penalty? b. What criminal fraud penalty might the government impose on Luis under Sec...

Q: Frank, a calendar year taxpayer, reports $100,000

Frank, a calendar year taxpayer, reports $100,000 of gross income and $60,000 of taxable income on his Year 1 return, which he files on March 12 of Year 2. He fails to report on the return a $52,000 l...

Q: Maria, a calendar year taxpayer, files her Year 1 individual

Maria, a calendar year taxpayer, files her Year 1 individual return on March 12 of Year 2 and pays the amount of tax due. She later discovers that she overlooked some deductions that she should have r...

Q: Your client, Meade Technical Solutions, proposes to merge with Dealy

Your client, Meade Technical Solutions, proposes to merge with Dealy Cyberlabs. In advance of the merger, you (a) issue an opinion concerning the FMV of Dealy, (b) prepare pro forma financials for the...

Q: a. Are net accounting income and DNI always the same amount

a. Are net accounting income and DNI always the same amount? b. If not, explain a common reason for a difference. c. Are capital gains usually included in DNI?

Q: Your client, Envirocosmetics, recently has filed for bankruptcy. In

Your client, Envirocosmetics, recently has filed for bankruptcy. In the course of bankruptcy proceedings, you (a) prepare a plan of reorganization that alters the rights of preferred stockholders, (b)...

Q: Which of the following communications between an accountant and client are privileged

Which of the following communications between an accountant and client are privileged? a. For tax preparation purposes only, client informs the accountant that she contributed $10,000 to a homeless s...

Q: Amy files her current year tax return on August 13 of the

Amy files her current year tax return on August 13 of the following year. She pays the amount due without requesting an extension. The tax shown on her return is $24,000. Her current year wage withhol...