Questions from Federal Taxation

Q: Dolly is a cash basis taxpayer. In 2018, she filed

Dolly is a cash basis taxpayer. In 2018, she filed her 2017 South Carolina income tax return and received a $2,200 refund. Dolly took the standard deduction on her 2017 Federal income tax return, but...

Q: Ralph has experienced financial difficulties as a result of his struggling business

Ralph has experienced financial difficulties as a result of his struggling business. He has been behind on his mortgage payment for the last six months. The mortgage holder, who is a friend of Ralph's...

Q: Jerry uses a building for business purposes. The building was purchased

Jerry uses a building for business purposes. The building was purchased on April 1, year 3, for $124,000. It was sold on October 3, year 6, for $200,000. Accumulated depreciation as of the date of sal...

Q: What is the actually “paid requirement” for the deduction of

What is the actually “paid requirement” for the deduction of an expense by a cash basis taxpayer? Does actual payment ensure a deduction? Explain.

Q: Aubry, a cash basis and calendar year taxpayer, decides to

Aubry, a cash basis and calendar year taxpayer, decides to reduce his taxable income for 2018 by buying $65,000 worth of supplies for his business on December 27, 2018. The supplies will be used up in...

Q: Angelo, an agent for an airline manufacturer, is negotiating a

Angelo, an agent for an airline manufacturer, is negotiating a sale with a representative of the US government and with a representative of a developing country. Angelo's company has sufficient capaci...

Q: Blaze operates a restaurant in Cleveland. He travels to Columbus to

Blaze operates a restaurant in Cleveland. He travels to Columbus to investigate acquiring a business. He incurs expenses as follows: $1,500 for travel, $2,000 for legal advice, and $3,500 for a market...

Q: Lavinia incurs various legal fees in obtaining a divorce. Which types

Lavinia incurs various legal fees in obtaining a divorce. Which types of expenses associated with the divorce are deductible by Lavinia, and which are not?

Q: What is the primary purpose of effective tax planning? Explain

What is the primary purpose of effective tax planning? Explain

Q: Classify each of the following expenditures paid in 2018 as a deduction

Classify each of the following expenditures paid in 2018 as a deduction for AGI, a deduction from AGI, or not deductible: a. Roberto gives cash to his father as a birthday gift. b. Sandra gives cash t...