Questions from Federal Taxation

Q: Use the IRS’s Statistics of Income page to determine how many individual

Use the IRS’s Statistics of Income page to determine how many individual income tax returns reported an AMT liability from 2013 to 2018. What percentage of returns filed in this time period report an...

Q: What would you expect the relationship to be between a taxpayer’s AGI

What would you expect the relationship to be between a taxpayer’s AGI and AMT liability? Find Figure D in Section 3 (Individual Tax Rates) of the 2015–2018 editions of IRS Publication 1304, Individual...

Q: Taxpayers who purchase health insurance coverage through the Health Insurance Marketplace may

Taxpayers who purchase health insurance coverage through the Health Insurance Marketplace may be eligible for the premium tax credit under § 36B. Use the IRS website to determine which taxpayers are e...

Q: Ruth Ames died on January 10, 2021. In filing the

Ruth Ames died on January 10, 2021. In filing the estate tax return, her executor, Melvin Sims, elects the primary valuation date and amount (fair market value on the date of death). On March 12, 2021...

Q: How are transactions using bitcoin (or another virtual currency) treated

How are transactions using bitcoin (or another virtual currency) treated under U.S. tax law? Locate the current IRS guidance on this question. Some background on bitcoin can be found at bitcoin.org/en...

Q: Many see the “step-up in basis at death”

Many see the “step-up in basis at death” rule as an expensive tax loophole enjoyed by the wealthy. Find the latest estimates of the revenue loss to the Treasury that is attributable to this rule. a. H...

Q: On his 2020 Federal income tax return, Rigved deducted state income

On his 2020 Federal income tax return, Rigved deducted state income taxes of $8,000 for amounts withheld and estimated tax payments made in 2020. When he filed his 2020 state income tax return in Apri...

Q: Marcia, a shareholder in a corporation with stores in five states

Marcia, a shareholder in a corporation with stores in five states, donated stock with a basis of $10,000 to a qualified charitable organization in 2020. Although the stock of the corporation was not t...

Q: On March 5, 2016, the Hortons borrowed $100,

On March 5, 2016, the Hortons borrowed $100,000 against the equity in their personal residence with the loan secured by that home. For 2016 and 2017, they were able to deduct the interest expense on t...

Q: Matt, who is single, always has elected to itemize deductions

Matt, who is single, always has elected to itemize deductions rather than take the standard deduction. In prior years, his itemized deductions always exceeded the standard deduction by a substantial a...