Questions from General Taxation

Q: Charles pays $120,000 for a single-life annuity

Charles pays $120,000 for a single-life annuity that will pay him $11,000 a year for life. Treasury Department tables estimate his expected remaining life at 15 years. a. How much of each $11,000 pay...

Q: Barney retired from the Marlin Corporation where he worked for 25 years

Barney retired from the Marlin Corporation where he worked for 25 years. Barney elects to receive his retirement benefits as an annuity over his remaining life, resulting in annual payments of $15,000...

Q: George has $91,700 in salary from his full-

George has $91,700 in salary from his full-time position and $43,000 in net income in 2017 from his sole proprietorship. What is his self-employment tax? What portion of this can he deduct?

Q: What types of investments are favored by tax law and why?

What types of investments are favored by tax law and why?

Q: Vera, a single individual, receives $18,000 of

Vera, a single individual, receives $18,000 of dividend income and $38,000 of interest income from tax-exempt bonds. Vera also receives Social Security benefits of $16,000. What is Vera’s gross income...

Q: Robert decided not to file his return on April 15 because he

Robert decided not to file his return on April 15 because he knew that he could not pay the balance due. He files his return on August 3, paying the full $4,000 balance. What are Robert’s expected lat...

Q: Five years ago, Cargo Corporation granted Mark a nonqualified stock option

Five years ago, Cargo Corporation granted Mark a nonqualified stock option to buy 3,000 shares of Cargo common stock at $10 per share exercisable for five years. At the date of the grant, Cargo stock...

Q: Kevin deliberately omitted $40,000 of gross income from his

Kevin deliberately omitted $40,000 of gross income from his restaurant on his 2017 tax return. The return indicated gross income of $200,000 when filed on April 14, 2018. When can the IRS no longer pu...

Q: Alison accidentally omitted $40,000 of gross income from the

Alison accidentally omitted $40,000 of gross income from the restaurant she owned on her 2016 tax return. The return showed gross income of $150,000 when filed on October 15, 2017. When can the IRS no...

Q: Thomas received $30,000 in a legal settlement in 2017

Thomas received $30,000 in a legal settlement in 2017. The tax treatment of the item is not certain. Thomas’s research results were ambiguous and he is not sure if the income is taxable. Because some...