Questions from Federal Taxation


Q: Jake loaned his cousin, Arnold, $10,000 in

Jake loaned his cousin, Arnold, $10,000 in March 2015 to open a cybercafe in Santa Barbara. Arnold signed a loan agreement to pay Jake 7% interest annually, with the principal due in 2018. Jake rece...

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Q: Susan loaned $2,000 to her minister a year ago

Susan loaned $2,000 to her minister a year ago. The loan is not evidenced by a note and does not bear interest. The minister has moved out of town without paying her back. She doesn't want to embar...

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Q: The Gallery is an indoor recreational facility. It employs 95 minimum

The Gallery is an indoor recreational facility. It employs 95 minimum wage employees and 7 management-level persons. During the past month, all employees of the facility participated in a promotion...

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Q: The Copeland Corporation acquires a machine for $5,000 and

The Copeland Corporation acquires a machine for $5,000 and pays $250 in state sales tax. The machine has a tax life of 7 years. Identify the tax issue(s) posed by the facts presented. Determine the...

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Q: The town of Dinsmore passed a bill requiring that all homes be

The town of Dinsmore passed a bill requiring that all homes be connected to the town sewer system. Baskin Ridge is the only section of town that does not have town sewers. Dinsmore will finance the...

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Q: As stated in the text, the federal income tax is the

As stated in the text, the federal income tax is the largest revenue-producing tax in use in the United States. Why do you think the income tax produces more revenue than any other tax?

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Q: Many legislative, administrative, and judicial resources are available on the

Many legislative, administrative, and judicial resources are available on the Internet. These can be located using a search engine or a tax directory site on the Internet. This assignment is designe...

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Q: Scott is single and wants to maximize his retirement income. He

Scott is single and wants to maximize his retirement income. He contributes the maximum allowable to his company's qualified pension plan. His adjusted gross income for the year is $73,000. Identify...

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Q: Sam, the owner of The Perfect Cut, a wholesale meat

Sam, the owner of The Perfect Cut, a wholesale meat distributor, unexpectedly dies during the current year. In an effort to provide equally for his two children, Sam’s will provides that the entire b...

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Q: The use of a “flat tax” to replace the current

The use of a “flat tax” to replace the current income tax system has received a considerable amount of interest in recent years. Various flat-tax proposals have been made, but the gist of a flat tax...

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