Questions from Taxation

Q: Cranberry Corporation has $3,240,000 of current year

Cranberry Corporation has $3,240,000 of current year taxable income. a. If the current year is a calendar year ending on December 31, 2017, calculate Cranberry’s regular income tax liability. b. If th...

Q: Mr. Tuck and Ms. Under organized a new business as

Mr. Tuck and Ms. Under organized a new business as an LLC in which they own equal interests. The new business generated a $4,800 operating loss for the year. a. If Mr. Tuck’s marginal tax rate before...

Q: Refer to the facts in the preceding problem. a.

Refer to the facts in the preceding problem. a. If the business is operated as a partnership, explain the payroll tax/self-employment tax implications for the entity, Thomas, and Angela. (No calculati...

Q: Mr. Lion, who is in the 37 percent tax bracket

Mr. Lion, who is in the 37 percent tax bracket, is the sole shareholder of Toto, Inc., which manufactures greeting cards. Toto’s average annual net profit (before deduction of Mr. Lion’s salary) is $2...

Q: Jurisdiction B levies a flat 7 percent tax on the first $

Jurisdiction B levies a flat 7 percent tax on the first $5 million of annual corporate income. a. Jersey Inc. generated $3.9 million income this year. Compute Jersey’s income tax and determine its ave...

Q: Mr. Pauper and Mrs. Queen are the equal shareholders in

Mr. Pauper and Mrs. Queen are the equal shareholders in Corporation PQ. Both shareholders have a 37 percent marginal tax rate. PQ’s financial records show the following. Gross income from sales of go...

Q: American Corporation has two equal shareholders, Mr. Freedom and Brave

American Corporation has two equal shareholders, Mr. Freedom and Brave Inc. In addition to their investments in American stock, both shareholders have made substantial loans to American. During the cu...

Q: Ms. Xie, who is in the 37 percent tax bracket

Ms. Xie, who is in the 37 percent tax bracket, is the sole shareholder and president of Xenon. The corporation’s financial records show the following. Gross income from sales of goods ……………………….$1,59...

Q: Mr. Vernon is the sole shareholder of Teva. He also

Mr. Vernon is the sole shareholder of Teva. He also owns the office building that serves as corporate headquarters. Last year, Teva paid $180,000 annual rent to Mr. Vernon for use of the building. Tev...

Q: In 1994, Mr. and Mrs. Adams formed ADC by

In 1994, Mr. and Mrs. Adams formed ADC by transferring $50,000 cash in exchange for 100 shares of common stock and a note from the corporation for $49,000. The note obligated ADC to pay 10 percent ann...