Questions from Federal Taxation

Q: Norma, who i5 single and uses the cash method of accounting

Norma, who i5 single and uses the cash method of accounting, lives in a state that imposes an income tax. In April 2018, she files her state income tax return for 2017 and pays an additional $1,000 in...

Q: Bob and Carol have been in and out of marital counseling for

Bob and Carol have been in and out of marital counseling for the past few years. Early in 2018, they decide to separate. However, because they are barely able to get by on their current incomes, they...

Q: The Wilmoths plan to purchase a house and would like to determine

The Wilmoths plan to purchase a house and would like to determine the after tax cost of financing its purchase. Given their projected taxable income, the Wilmoths are in the 24% Federal incon1e tax br...

Q: In Decen1ber of each year, Eleanor Young contributes 10%. of

In Decen1ber of each year, Eleanor Young contributes 10%. of her gross income to the United Way (a 50% organization). Eleanor, who is in the 24% marginal tax bracket, is considering the following alte...

Q: Paul and Karen Kent are married, and both are employed (

Paul and Karen Kent are married, and both are employed (Paul earns $44,000 and Karen earns $9,000 during 2018). Paul and Karen have two dependent children, both under the age of 13 (Samuel and Joy). S...

Q: Your client, Jasper, is an employee of a defense contractor

Your client, Jasper, is an employee of a defense contractor and was assigned to work on a military base in Australia. As a condition of his employment, he \Vas required to live in housing that was pro...

Q: Jim and Mary Jean are married and have two dependent children under

Jim and Mary Jean are married and have two dependent children under the age of 13. Both parents are employed outside the home and, during 2018, earn salaries as follows: $16,000 (Jim) and $5,200 (Mary...

Q: Jenna, a longtin1e client of yours, is an architect and

Jenna, a longtin1e client of yours, is an architect and the president of the Communications local Rotary chapter. To keep up to date with the latest developments in her Digging Deeper profession, she...

Q: Tom Howard and Frank Peters are good friends (and former college

Tom Howard and Frank Peters are good friends (and former college roommates). Each owns investment property in the other's hometown (Tom lives in Kalan1azoo, MI; Frank lives in Austin, TX). To make the...

Q: Joyce, a widow, lives in an apartment with her two

Joyce, a widow, lives in an apartment with her two minor children (ages 8 and 10), whom she supports. Joyce earns $33,000 during 2018. She uses the standard deduction. a. Calculate the an1ount, if any...