Questions from Federal Taxation

Q: Based solely on the definitions in the chapter, is the Social

Based solely on the definitions in the chapter, is the Social Security tax a proportional, regressive, or progressive tax? Explain, and state how the tax might be viewed differently.

Q: If you were in the 28% marginal tax bracket and you

If you were in the 28% marginal tax bracket and you could choose either a $1,000 tax credit or a $3,000 tax deduction, which would give you the most tax savings? Why?

Q: Ikleberry is a self-employed fisherman. He buys a health

Ikleberry is a self-employed fisherman. He buys a health insurance policy by donating 1,000 salmon filets to the Nordisk Insurance Company’s annual Christmas party. During the year, Ikleberry receiv...

Q: Salina is an apartment manager and is paid $6,000

Salina is an apartment manager and is paid $6,000 per year. The owner of the apartments offered her the option of a $300-per-month living allowance or the use of an apartment rent-free. Salina chose...

Q: Taki was injured in an airplane crash. He sues the airline

Taki was injured in an airplane crash. He sues the airline and receives $4,400 for his pain and suffering, $3,300 for lost wages while he recuperated from his injuries, and $7,000 in punitive damages...

Q: Sonya purchases a house for $65,000. The seller

Sonya purchases a house for $65,000. The seller had listed the house for sale at $80,000 but got into financial trouble and had to accept Sonya's $65,000 offer to avoid bankruptcy. Identify the tax i...

Q: Bud borrows $20,000 from a friend. Before he

Bud borrows $20,000 from a friend. Before he can repay any of the loan, the friend dies. His friend's will provides that any amounts owed to him are to be forgiven upon his death. Identify the tax...

Q: Perry Corporation leases a building to Jimison Corporation for $10,

Perry Corporation leases a building to Jimison Corporation for $10,000 per month. The terms of the lease provide that any improvements to the building will revert to Perry upon termination of the lea...

Q: In April, a tornado damages the house owned by Delbert and

In April, a tornado damages the house owned by Delbert and Debbie. The damaged residence required extensive repairs, making it necessary for Delbert and Debbie to move into a motel and eat their meals...

Q: The Small Business Job Protection Act of 1996 limited the exclusion for

The Small Business Job Protection Act of 1996 limited the exclusion for damages received to nonpunitive damages received on account of a personal physical injury or physical sickness. The new law spe...