Questions from Taxation

Q: Mrs. Eller’s corporate employer has a cafeteria plan under which its

Mrs. Eller’s corporate employer has a cafeteria plan under which its employees can receive a $3,000 year-end Christmas bonus or enroll in a qualified medical reimbursement plan that pays up to $3,000...

Q: Mr. Nixon and Mr. Ryan are employed by HD Inc

Mr. Nixon and Mr. Ryan are employed by HD Inc., which provides its employees with free parking. If the parking were not available, Mr. Nixon would pay $35 a month to a city garage. Mr. Ryan uses publi...

Q: In 2016, Mrs. Ulm paid $80,000 for

In 2016, Mrs. Ulm paid $80,000 for a corporate bond with a $100,000 stated redemption value. Based on the bond’s yield to maturity, amortization of the $20,000 discount was $1,512 in 2016, $1,480 in 2...

Q: Fifteen years ago, Mr. Fairhold paid $50,000

Fifteen years ago, Mr. Fairhold paid $50,000 for a single-premium annuity contract. This year, he began receiving a $1,300 monthly payment that will continue for his life. On the basis of his age, he...

Q: Refer to the facts in the preceding problem. Assume that on

Refer to the facts in the preceding problem. Assume that on January 1, 2025, Mr. Fairhold’s unrecovered investment in the annuity is $1,875. a. How much of his total 2025 annuity payments ($15,600) ar...

Q: In 2016, Mr. Dale paid $47,600 for

In 2016, Mr. Dale paid $47,600 for 3,400 shares of GKL Mutual Fund and elected to reinvest his year-end dividends in additional shares. In 2016 and 2017, he received Form 1099s reporting the following...

Q: Vern plans to invest $100,000 in a growth stock

Vern plans to invest $100,000 in a growth stock, in year 0. The stock is not expected to pay dividends. However, Vern predicts that it will be worth $135,000 when he sells it in year 3. The $35,000 in...

Q: CVF owned 2,000 shares of Jarvis nonvoting common stock with

CVF owned 2,000 shares of Jarvis nonvoting common stock with a $225,000 basis. In each of the following cases, determine CVF’s recognized gain or loss on the disposition of this stock: a. CVF exchange...

Q: Mr. Lay, who has a 37 percent marginal tax rate

Mr. Lay, who has a 37 percent marginal tax rate on ordinary income, earned a $22,030 dividend on his investment in Rexford Mutual Fund. Compute the income tax and the Medicare contribution tax on this...

Q: Refer to the preceding problem. For each case, determine CVF’s

Refer to the preceding problem. For each case, determine CVF’s tax basis in the security received in the exchange. Data from Problem 19: CVF owned 2,000 shares of Jarvis nonvoting common stock with...