Questions from Taxation

Q: Peet Company provides free on-site day care for its employees

Peet Company provides free on-site day care for its employees with preschool children. Determine the pretax value of the care for each of the following employees: a. Mrs. Udolf, who has a 32 percent m...

Q: On September 30, 2014, Stalling Inc. issued 2,

On September 30, 2014, Stalling Inc. issued 2,000 shares of its publicly traded stock as compensation to its employee, Mr. Harry. On the date of issuance, the stock’s fair market value was $40,000. Un...

Q: In each of the following cases, determine if the United States

In each of the following cases, determine if the United States has jurisdiction to tax Mr. KT. a. Mr. KT is a U.S. citizen but has been a permanent resident of Belgium since 1993. b. Mr. KT is a citiz...

Q: Lardo Inc. plans to build a new manufacturing plant in either

Lardo Inc. plans to build a new manufacturing plant in either Country X or Country Y. It projects gross revenue in either location of $4 million per year. Operating expenses would be $1.5 million in C...

Q: Refer to the facts in the preceding problem. Five years after

Refer to the facts in the preceding problem. Five years after Gogo granted the option to Mrs. Mill, she exercised it on a day when Gogo stock was selling for $10.31 per share. a. How much income must...

Q: In 2013, BT granted a nonqualified stock option to Ms.

In 2013, BT granted a nonqualified stock option to Ms. Pearl to buy 500 shares of BT stock at $20 per share for five years. At date of grant, BT stock was trading on Nasdaq for $18.62 per share. In 20...

Q: In 2011 (year 0), Mrs. Linsey exercised a stock

In 2011 (year 0), Mrs. Linsey exercised a stock option by paying $100 per share for 225 shares of ABC stock. The market price at date of exercise was $312 per share. In 2018, she sold the 225 shares f...

Q: Trent Inc. needs an additional worker on a multiyear project.

Trent Inc. needs an additional worker on a multiyear project. It could hire an employee for a $65,000 annual salary. Alternatively, it could engage an independent contractor for a $72,000 annual fee....

Q: Mr. Toomey (a 45-year-old single taxpayer

Mr. Toomey (a 45-year-old single taxpayer) exercised an ISO and purchased $380,000 worth of his employer’s stock for only $113,000. His only other income was his $158,500 salary, and he doesn’t itemiz...

Q: Mrs. Kirk withdrew $30,000 from a retirement account

Mrs. Kirk withdrew $30,000 from a retirement account and used the money to furnish her new home. Her marginal tax rate is 24 percent. Compute the tax cost of the withdrawal in each of the following ca...