Questions from Individual Taxation

Q: Explain why Congress enacted the UNICAP rules and describe the burdens these

Explain why Congress enacted the UNICAP rules and describe the burdens these rules place on taxpayers.

Q: Describe how a business adopts a permissible accounting method. Explain whether

Describe how a business adopts a permissible accounting method. Explain whether a taxpayer can adopt an impermissible accounting method.

Q: Describe why the IRS might be skeptical of permitting requests for changes

Describe why the IRS might be skeptical of permitting requests for changes in accounting method without a good business purpose?

Q: Which is a more appropriate tax rate to use to compare taxpayers’

Which is a more appropriate tax rate to use to compare taxpayers’ tax burdens – the average or the effective tax rate? Why?

Q: Manny hired his brother’s firm to provide accounting services to his business

Manny hired his brother’s firm to provide accounting services to his business. During the current year, Manny paid his brother’s firm $82,000 for services even though other firms were willing to provi...

Q: Indicate the amount (if any) that Michael can deduct as

Indicate the amount (if any) that Michael can deduct as ordinary and necessary business deductions in each of the following situations and explain your solution. a. From time to time, Michael rents a...

Q: Christopher is a cash-method, calendar-year taxpayer,

Christopher is a cash-method, calendar-year taxpayer, and he made the following cash payments related to his business this year. Calculate the after-tax cost of each payment assuming he has a 30 per...

Q: On November 1 of year 0, Jaxon borrowed $50,

On November 1 of year 0, Jaxon borrowed $50,000 from Bucksnort Savings and Loan for use in his business. In December, Jaxon paid interest of $4,500 relating to the 12-month period from November of yea...

Q: Meg O’Brien received a gift of some small-scale jewelry manufacturing

Meg O’Brien received a gift of some small-scale jewelry manufacturing equipment that her father had used for personal purposes for many years. Her father originally purchased the equipment for $1,500....

Q: Gary inherited a Maine summer cabin on 10 acres from his grandmother

Gary inherited a Maine summer cabin on 10 acres from his grandmother. His grandparents originally purchased the property for $500 in 1950 and built the cabin at a cost of $10,000 in 1965. His grandfat...