Questions from General Taxation

Q: Mrs. K is completely blind, while Mr. L is

Mrs. K is completely blind, while Mr. L is paralyzed from the waist down. Both individuals have the same income. The Internal Revenue Code provides a preferential deduction for individuals who are bli...

Q: Four years ago, the citizens of Country C complained that the

Four years ago, the citizens of Country C complained that the national tax system was too uncertain because the government changed the tax laws so frequently. In response to this criticism, the govern...

Q: Two years ago, the government of State P decided to improve

Two years ago, the government of State P decided to improve the horizontal equity of its individual income tax by allowing families to deduct the cost of heating and air conditioning their homes. This...

Q: Jayanthi and Krish each own a 50 percent general partner interest in

Jayanthi and Krish each own a 50 percent general partner interest in the JK Partnership. The following information is available regarding the partnership’s 2018 activities. a. Calc...

Q: Jurisdiction J decides to clean up its streets, parks, and

Jurisdiction J decides to clean up its streets, parks, and waterways by providing a tax break for businesses that assign employees to pick up trash for a minimum number of hours each month. The annual...

Q: Mr. and Mrs. J’s taxable income from their business has

Mr. and Mrs. J’s taxable income from their business has been stable for the past five years, and their average federal income tax rate has ranged between 22 and 24 percent. Because of a boom in the lo...

Q: Firm V must choose between two alternative investment opportunities. On the

Firm V must choose between two alternative investment opportunities. On the basis of current tax law, the firm projects that the NPV of Opportunity 1 is significantly less than the NPV of Opportunity...

Q: Company WB is evaluating a business opportunity with uncertain tax consequences.

Company WB is evaluating a business opportunity with uncertain tax consequences. If the company takes a conservative approach by assuming the least beneficial tax consequences, the tax cost is $95,000...

Q: Refer to the facts in problem 3. Company WB is considering

Refer to the facts in problem 3. Company WB is considering engaging a CPA to prepare a request for a private letter ruling from the IRS concerning the tax consequences of the business opportunity. Pr...

Q: Ms. O is the chief financial officer for Firm XYZ.

Ms. O is the chief financial officer for Firm XYZ. The marketing department requested approval for an $80,000 cash expenditure. The request points out that the expenditure would be deductible. Therefo...