Questions from Federal Taxation

Q: In 2021, the taxpayer became ineligible to use the cash method

In 2021, the taxpayer became ineligible to use the cash method of accounting. At the beginning of the year, accounts receivable totaled $240,000, accounts payable for merchandise totaled $80,000, and...

Q: Would a calendar or fiscal year be more suitable for a ski

Would a calendar or fiscal year be more suitable for a ski lodge? Why?

Q: Determine whether each of the following independent statements best applies to a

Determine whether each of the following independent statements best applies to a defined contribution plan (DCP), a defined benefit plan (DBP), both (B), or neither (N). a. The amount to be received a...

Q: Which of the following would be considered a tax benefit or advantage

Which of the following would be considered a tax benefit or advantage of a qualified retirement plan? a. Certain distributions may be subject to capital gain treatment. b. Employer contributions are d...

Q: Ali owns 100 shares of Brown Corporation stock. He purchased the

Ali owns 100 shares of Brown Corporation stock. He purchased the stock at five different times and at five different prices per share as indicated. / On April 28, 2021, Ali will sell 40 shares of Brow...

Q: Penny plans to retire in 2022 at age 70. Identify any

Penny plans to retire in 2022 at age 70. Identify any issues that Penny faces with respect to distributions from her qualified retirement plan.

Q: A law practice was incorporated on January 1, 2021, and

A law practice was incorporated on January 1, 2021, and expects to earn $25,000 per month before deducting attorney Shonda’s salary. Shonda owns 100% of the stock in the practice. The corporation and...

Q: Clyde had worked for many years as the chief executive of Red

Clyde had worked for many years as the chief executive of Red Industries, Inc., and had been a major shareholder. Clyde and the company had a falling out, and Clyde was terminated. Clyde and Red execu...

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

Fred, a cash basis taxpayer, received a $15,000 bonus from his employer in 2021. The bonus was based on the company’s profits for 2020. In 2022, the company discovered that its 2020 profits were compu...

Q: Steven established a sole proprietorship in 2015. He sold $1231

Steven established a sole proprietorship in 2015. He sold $1231 assets at a loss in 2019 and 2020. He had only sold $1231 assets at a gain before 2019. In 2021, he could sell a $1231 asset at a gain a...