Questions from Federal Taxation

Q: A law practice was incorporated on January 1, 2018, and

A law practice was incorporated on January 1, 2018, and expects to earn $25,000 per month before deducting the lawyer's salary. The lawyer owns 100% of the stock. The corporation and the lawyer both u...

Q: Art Funkel started his incorporated medical practice on June 1, 2018

Art Funkel started his incorporated medical practice on June 1, 2018. He immediately made an S election for the corporation. Art would like the corporation to adopt a tax year ending May 31 so that a...

Q: Fred, a cash basis taxpayer, received a $15,

Fred, a cash basis taxpayer, received a $15,000 bonus from his employer in 2018. The bonus was based on the company's profits for 2017. In 2019, the company discovered that its 2017 profits were compu...

Q: In December 2018, Nell, Inc., an accrual basis taxpayer

In December 2018, Nell, Inc., an accrual basis taxpayer paid $12,000 for insurance premiums for the 2019 calendar year. How much of the premiums can Nell, Inc., deduct in 2018?

Q: In 2018, taxpayer became ineligible to use the cash method of

In 2018, taxpayer became ineligible to use the cash method of accounting. At the beginning of the year, accounts receivable totaled $240,000, account payable for merchandise totaled $80,000, and the i...

Q: Disregarding any small business exceptions, for the current year, which

Disregarding any small business exceptions, for the current year, which of the following situations will result in a taxpayer owing a penalty for underpayment of taxes? a. A married filing joint taxpa...

Q: Osprey Corporation, an accrual basis taxpayer, had taxable income for

Osprey Corporation, an accrual basis taxpayer, had taxable income for 2018 and paid $40,000 on its estimated state income tax for the year. During 2018, the company received a $4,000 refund upon filin...

Q: Suppose an individual is 55 years old. How much of an

Suppose an individual is 55 years old. How much of an additional catch-up IRA contribution can the person make?

Q: During his senior year in college, Sandy is drafted by the

During his senior year in college, Sandy is drafted by the Los Angeles Dodgers. When he graduates, he expects to sign a five-year contract in the range of $1.7 million per year. Sandy plans to marry h...

Q: What conditions cause the golden parachute arrangement to be penalized?

What conditions cause the golden parachute arrangement to be penalized?