Questions from General Taxation

Q: Mark’s employer pays 55 percent of the premiums for a disability insurance

Mark’s employer pays 55 percent of the premiums for a disability insurance policy and Mark pays for the other 45 percent. The policy pays Mark 65 percent of his normal salary in the event he is injure...

Q: Sara has a $5,500 per year scholarship to attend

Sara has a $5,500 per year scholarship to attend the state university. Sara spent $4,000 for tuition, $500 for required textbooks and $1,000 for room and board. Sara also had a part-time job on campus...

Q: Giant Corporation (a U.S. corporation) formed Small

Giant Corporation (a U.S. corporation) formed Small Corporation in a foreign country. Giant owns 70% of Small Corporation’s stock and the remaining stock is owned by citizens of the country in which S...

Q: Nick, age 53, is single and has AGI of $

Nick, age 53, is single and has AGI of $66,000. He contributes $5,000 to his IRA in 2017. a. How much can Nick deduct if he is not covered by an employer-sponsored qualified retirement plan? b. How...

Q: Jennifer, age 35, is single and an active participant in

Jennifer, age 35, is single and an active participant in her employer’s qualified retirement plan. Compute the maximum Roth IRA contribution that she can make in 2017 if a. her adjusted gross income...

Q: Larry has a scholarship to attend the local college. The scholarship

Larry has a scholarship to attend the local college. The scholarship provides $7,000 for tuition, books, and related expenses for the academic year. Larry only spent $3,200 for tuition, books, and rel...

Q: Carrie owns a business that she operates as a sole proprietorship.

Carrie owns a business that she operates as a sole proprietorship. The business had a net profit of $25,000 in 2017. This is Carrie’s only earned income. a. How much must she pay for self-employment...

Q: Luis operates a bakery as a sole proprietorship which generated $280

Luis operates a bakery as a sole proprietorship which generated $280,000 in net income. He has four bakers whom he employs on a full-time basis and who participate in a company-paid health insurance p...

Q: Alexander works as an electrician at a small company that provides no

Alexander works as an electrician at a small company that provides no retirement benefits. He receives a salary of $45,000. In addition, Alexander operates a small roof repair service as a sole propri...

Q: Mark works in a foreign country for the entire calendar year.

Mark works in a foreign country for the entire calendar year. His salary is $120,000 and he pays $18,000 in tax to the foreign government. His other taxable income (from U.S. sources) after all deduct...