Questions from Individual Taxation

Q: Jimmy has fallen on hard times recently. Last year he borrowed

Jimmy has fallen on hard times recently. Last year he borrowed $250,000 and added an additional $50,000 of his own funds to purchase $300,000 of undeveloped real estate. This year the value of the rea...

Q: Grady is a 45-year-old employee with AMUCK Garbage

Grady is a 45-year-old employee with AMUCK Garbage Corporation. AMUCK pays group-term life insurance premiums for employees, and Grady chose the maximum face amount of $120,000. What amount, if any, o...

Q: Fred currently earns $9,000 per month. Fred has

Fred currently earns $9,000 per month. Fred has been offered the chance to transfer for three to five years to an overseas affiliate. His employer is willing to pay Fred $10,000 per month if he accept...

Q: Cecil cashed in a Series EE savings bond with a redemption value

Cecil cashed in a Series EE savings bond with a redemption value of $14,000 and an original cost of $9,800. For each of the following independent scenarios, calculate the amount of interest Cecil will...

Q: Brad purchased land for $45,000 this year. At

Brad purchased land for $45,000 this year. At year-end Brad sold the land for $51,700 and paid a sales commission of $450. What effect does this transaction have on Brad’s gross income? Explain.

Q: Grady is a member of a large family and received the following

Grady is a member of a large family and received the following payments this year. For each payment, determine whether the payment constitutes realized income and determine the amount of each payment...

Q: Bart is the favorite nephew of his aunt Thelma. Thelma transferred

Bart is the favorite nephew of his aunt Thelma. Thelma transferred several items of value to Bart. For each of the following transactions, determine the effect on Bart’s gross income: a. Thelma gave B...

Q: Terry was ill for three months and missed work during this period

Terry was ill for three months and missed work during this period. During his illness Terry received $4,500 in sick pay from a disability insurance policy. What amounts are included in Terry’s gross i...

Q: Tim’s parents plan to provide him with $50,000 to

Tim’s parents plan to provide him with $50,000 to support him while he establishes a new landscaping business. In exchange for the support, Tim will maintain the landscape at his father’s business. Un...

Q: What amounts are included in gross income for the following taxpayers?

What amounts are included in gross income for the following taxpayers? Explain your answers. a. Janus sued Tiny Toys for personal injuries from swallowing a toy. Janus was paid $30,000 for medical cos...