Questions from Individual Taxation

Q: Why is understanding the time value of money important for tax planning

Why is understanding the time value of money important for tax planning?

Q: Reese, a calendar-year taxpayer, uses the cash method

Reese, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship. In late December she received a $20,000 bill from her accountant for consulting services related to her...

Q: Under what circumstances would you expect the after-tax return from

Under what circumstances would you expect the after-tax return from an investment in a capital asset to approach that of tax-exempt assets assuming equal before-tax rates of return?

Q: Using the facts from the previous problem, when should Reese pay

Using the facts from the previous problem, when should Reese pay the bill if she expects her marginal tax rate to be 33 percent next year? 25 percent next year?

Q: Hank, a calendar-year taxpayer, uses the cash method

Hank, a calendar-year taxpayer, uses the cash method of accounting for his sole proprietorship. In late December he performed $20,000 of legal services for a client. Hank typically requires his client...

Q: Using the facts from the previous problem, when should Hank send

Using the facts from the previous problem, when should Hank send the bill if he expects his marginal tax rate to be 33 percent next year? 25 percent next year?

Q: Geraldo recently won a lottery and chose to receive $100,

Geraldo recently won a lottery and chose to receive $100,000 today instead of an equivalent amount in ten years, computed using an 8 percent rate of return. Today, he learned that interest rates are e...

Q: Tawana owns and operates a sole proprietorship and has a 40 percent

Tawana owns and operates a sole proprietorship and has a 40 percent marginal tax rate. She provides her son, Jonathon, $8,000 a year for college expenses. Jonathon works as a pizza delivery person eve...

Q: Moana is a single taxpayer who operates a sole proprietorship. She

Moana is a single taxpayer who operates a sole proprietorship. She expects her taxable income next year to be $250,000, of which $200,000 is attributed to her sole proprietorship. Moana is contemplati...

Q: Orie and Jane, husband and wife, operate a sole proprietorship

Orie and Jane, husband and wife, operate a sole proprietorship. They expect their taxable income next year to be $300,000, of which $125,000 is attributed to the sole proprietorship. Orie and Jane are...