Questions from General Taxation

Q: Betsy receives a salary of $50,000 from her employer

Betsy receives a salary of $50,000 from her employer (a retail clothing store) and several fringe benefits. Her employer pays premiums of $300 for her $40,000 group term life insurance coverage and pa...

Q: In year 1, Highrise Company contracts to manufacture a piece of

In year 1, Highrise Company contracts to manufacture a piece of customized equipment for a customer. The contract will take two years to complete. The contract price is $250,000 and the company estima...

Q: Can tax return preparers be assessed penalties?

Can tax return preparers be assessed penalties?

Q: Mac’s 24-year-old daughter, Alana, is a

Mac’s 24-year-old daughter, Alana, is a full-time student. In 2017, Mac gives Alana 600 shares of Highgrowth stock. Mac purchased the stock 10 months ago at $20 per share. On the gift date, the stock...

Q: Luis received 400 shares of his employer’s stock as a bonus.

Luis received 400 shares of his employer’s stock as a bonus. He must return the stock to the company if he leaves before the 5-year vesting period ends. The fair market value of the stock at the time...

Q: Jessica has $10,000 invested in corporate bonds with a

Jessica has $10,000 invested in corporate bonds with a stated interest rate of 7 percent and $10,000 in tax-exempt municipal bonds issued for governmental activities with a stated interest rate of 5.5...

Q: Joshua loans his son, Seth, $100,000 interest

Joshua loans his son, Seth, $100,000 interest free for five years. Seth uses the money for a down payment on his home. Assume that the applicable federal interest rate is 4 percent. a. What are the t...

Q: Sheldon Corporation loans $80,000 interest free for one year

Sheldon Corporation loans $80,000 interest free for one year to Lynn, an employee. Assume that the applicable federal interest rate is 4 percent. Lynn uses the loan to pay for personal debts. What are...

Q: Larry, age 32, works for Horizon Corporation. His annual

Larry, age 32, works for Horizon Corporation. His annual salary is $60,000 and he is not a key employee. Horizon provides the following benefits to all employees: • Group term life insurance (each em...

Q: Jill worked for a business in Denver. She took a new

Jill worked for a business in Denver. She took a new job with a different company in Colorado Springs, 90 miles away. Her commuting distance from her old home to her old employer in Denver was 15 mile...