Questions from Individual Taxation

Q: Jayanna, an advertising consultant, is contemplating instructing some of her

Jayanna, an advertising consultant, is contemplating instructing some of her clients to pay her in cash so that she does not have to report the income on her tax return. Use an available tax service t...

Q: Yong recently paid his accountant $10,000 for elaborate tax

Yong recently paid his accountant $10,000 for elaborate tax planning strategies that exploit the timing strategy. Assuming this is an election year and there could be a power shift in the White House...

Q: Billups, a physician and cash-method taxpayer, is new

Billups, a physician and cash-method taxpayer, is new to the concept of tax planning and recently learned of the timing strategy. To implement the timing strategy, Billups plans to establish a new pol...

Q: Tesha works for a company that pays a year-end bonus

Tesha works for a company that pays a year-end bonus in January of each year (instead of December of the preceding year) to allow employees to defer the bonus income. Assume Congress recently passed t...

Q: What is an “implicit tax” and how does it affect

What is an “implicit tax” and how does it affect a taxpayer’s decision to purchase municipal bonds?

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

Isabel, 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 he...

Q: Using the facts from the previous problem, how would your answer

Using the facts from the previous problem, how would your answer change if Isabel’s after-tax rate of return were 8 percent?

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

Manny, 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. Manny typically requires his clie...

Q: Using the facts from the previous problem, how would your answer

Using the facts from the previous problem, how would your answer change if Manny’s after-tax rate of return were 8 percent?

Q: Camille Sikorski was divorced last year. She currently owns and provides

Camille Sikorski was divorced last year. She currently owns and provides a home for her 15-year-old daughter, Kaly, and 18-year-old son, Parker. Both children lived in Camille’s home for the entire ye...