Questions from Individual Taxation

Q: Bryan followed in his father’s footsteps and entered into the carpet business

Bryan followed in his father’s footsteps and entered into the carpet business. He owns and operates I Do Carpet (IDC). Bryan prefers to install carpet only, but in order to earn addi...

Q: Hank started a new business in June of last year, Hank’s

Hank started a new business in June of last year, Hank’s Donut World (HW for short). He has requested your advice on the following specific tax matters associated with HWâ€...

Q: R.E.M., a calendar-year corporation and

R.E.M., a calendar-year corporation and Athens, Georgia band, recently sold tickets ($20,000,000) for concerts scheduled in the United States for next year and the following year. For financial statem...

Q: Joe operates a business that locates and purchases specialized assets for clients

Joe operates a business that locates and purchases specialized assets for clients, among other activities. Joe uses the accrual method of accounting but he doesn’t keep any significant inventories of...

Q: Jack, a geologist, had been debating for years whether or

Jack, a geologist, had been debating for years whether or not to venture out on his own and operate his own business. He had developed a lot of solid relationships with clients and he believed that ma...

Q: Why does the law generally require partnerships to adopt a tax year

Why does the law generally require partnerships to adopt a tax year consistent with the year used by the partners?

Q: Does the kiddie tax apply to all children no matter their age

Does the kiddie tax apply to all children no matter their age? Explain.

Q: How does an entity choose its tax year? Is it the

How does an entity choose its tax year? Is it the same process no matter the type of tax year-end the taxpayer adopts?

Q: Explain when an expenditure should be “capitalized” rather than expensed

Explain when an expenditure should be “capitalized” rather than expensed based upon accounting principles. From time to time, it is suggested that all business expenditures should be expensed for tax...

Q: Describe the 12-month rule for determining whether and to what

Describe the 12-month rule for determining whether and to what extent businesses should capitalize or immediately deduct prepaid expenses such as insurance or security contracts. Explain the apparent...