Questions from Individual Taxation

Q: alculate the amount of the child and dependent care credit allowed for

alculate the amount of the child and dependent care credit allowed for 2018 in each of the following cases, assuming the taxpayers had no income other than the stated amounts. a. William and Carla fil...

Q: The Au Natural Clothing Corporation has changed its year-end from

The Au Natural Clothing Corporation has changed its year-end from a calendar yearend to March 31, with permission from the IRS. The income for its short period from January 1 to March 31 is $24,000. C...

Q: On September 14, 2018, Jay purchased a passenger automobile that

On September 14, 2018, Jay purchased a passenger automobile that is used 75 percent in his accounting business. The automobile has a basis for depreciation purposes of $43,000, and Jay uses the accele...

Q: Indicate whether the following statements are true or false: Decreasing

Indicate whether the following statements are true or false: Decreasing one’s tax liability through legal methods is called tax planning, while illegally reducing taxes is called tax evasion. In a “cl...

Q: Tom has a successful business with $100,000 of taxable

Tom has a successful business with $100,000 of taxable income before the election to expense in 2018. He purchases one new asset in 2018, a new machine which is 7­year MACRS property and costs $25,000...

Q: Derek purchases a small business from Art on July 1, 2018

Derek purchases a small business from Art on July 1, 2018. He paid the following amounts for the business: a. How much of the $325,000 purchase price is for Section 197 intangible assets? b. What a...

Q: Susan is a single taxpayer, 26 years of age, with

Susan is a single taxpayer, 26 years of age, with AGI of $28,000 and no tax-exempt income. She did not have minimum essential coverage for 8 months in 2018. Compute Susan’s individual shared responsib...

Q: Nadia Shalom has the following transactions during the year: Sale

Nadia Shalom has the following transactions during the year: Sale of office equipment on March 15 that cost $19,000 when purchased on July 1, 2016. Nadia has claimed $3,000 in depreciation and sells...

Q: Steve Drake sells a rental house on January 1, 2018,

Steve Drake sells a rental house on January 1, 2018, and receives $120,000 cash and a note for $45,000 at 10 percent interest. The purchaser also assumes the mortgage on the property of $35,000. Steve...

Q: Serena is a 40-year-old single taxpayer. She

Serena is a 40-year-old single taxpayer. She operates a small business on the side as a sole proprietorship. Her 2018 Schedule C reports net profits of $5,624. Her employer does not offer health insur...