Questions from Individual Taxation

Q: Assume Ellina earns a 10 percent after-tax rate of return

Assume Ellina earns a 10 percent after-tax rate of return, and that she owes a friend $1,200. Would she prefer to pay the friend $1,200 today or $1,750 in four years?  

Q: Jonah has the choice of paying Rita $10,000 today

Jonah has the choice of paying Rita $10,000 today or $40,000 in ten years. Assume Jonah can earn a 12 percent after-tax rate of return. Which should he choose?

Q: Marlon and Latoya recently started building a house. They had to

Marlon and Latoya recently started building a house. They had to pay $300 to the county government for a building permit. Is the $300 payment a tax? Why or why not?

Q: Paula could not reach an agreement with the IRS at her appeals

Paula could not reach an agreement with the IRS at her appeals conference and has just received a 90-day letter. If she wants to litigate the issue but does not have sufficient cash to pay the propose...

Q: Assume Rafael can earn an 8 percent after-tax rate of

Assume Rafael can earn an 8 percent after-tax rate of return. Would he prefer $1,000 today or $1,500 in five years?

Q: Sophia recently won a tax case litigated in the 7th Circuit.

Sophia recently won a tax case litigated in the 7th Circuit. She recently heard that the Supreme Court denied the writ of certiorari. Should she be happy or not, and why?

Q: True or False. For purposes of determining head of household filing

True or False. For purposes of determining head of household filing status, the taxpayer’s mother or father is considered to be a qualifying person of the taxpayer (even if the mother or father does n...

Q: Given the following tax structure, what tax would need to be

Given the following tax structure, what tax would need to be assessed on Venita to make the tax horizontally equitable?

Q: Yong’s tax return was audited because he calculated his tax liability incorrectly

Yong’s tax return was audited because he calculated his tax liability incorrectly. What IRS audit procedure identified his tax return for audit?

Q: Randy deducted a high level of itemized deductions two years ago relative

Randy deducted a high level of itemized deductions two years ago relative to his income level. He recently received an IRS notice requesting documentation for his itemized deductions. What audit proce...