Questions from Taxation

Q: Mr. T is considering a strategy to defer $10,

Mr. T is considering a strategy to defer $10,000 income for five years with no significant opportunity cost. Discuss the strategic implications of the following independent assumptions: a. Mr. T is ag...

Q: Assume that the U.S. Congress replaces the current individual

Assume that the U.S. Congress replaces the current individual and corporate income tax rate structures with a proportionate rate that applies to both types of taxpayers. Discuss the effect of this cha...

Q: Compare the potential tax savings of an income shift from one entity

Compare the potential tax savings of an income shift from one entity to another if the entities are subject to: a. A progressive income tax system with rates from 5 percent to 19 percent. b. A progres...

Q: Why do income shifts and deduction shifts usually occur between taxpayers who

Why do income shifts and deduction shifts usually occur between taxpayers who are related parties?

Q: Firm A expects to receive a $25,000 item of

Firm A expects to receive a $25,000 item of income in August and a second $25,000 item of income in December. The firm could delay the receipt of both items until January. As a result, it would defer...

Q: Nello Company owed $23,400 overdue rent to its landlord

Nello Company owed $23,400 overdue rent to its landlord, Bonview Inc. Because Nello is a desirable tenant, Bonview agreed to settle the overdue account for a $15,000 cash payment from Nello. Both Nell...

Q: Why do tax preferences often result in differences between book income and

Why do tax preferences often result in differences between book income and taxable income? Would a book/tax difference from a tax preference be a permanent difference or a temporary difference? Which...

Q: Firms generally prefer to engage in transactions that create assets instead of

Firms generally prefer to engage in transactions that create assets instead of liabilities. However, firms prefer transactions generating deferred tax liabilities to transactions generating deferred t...

Q: Describe the contrasting treatment of prepaid income under GAAP and under the

Describe the contrasting treatment of prepaid income under GAAP and under the tax law, and explain how each treatment reflects a different principle of conservatism.

Q: Discuss the choice of a taxable year for the following businesses:

Discuss the choice of a taxable year for the following businesses: a. Retail plant and garden center. b. French bakery. c. Chimney cleaning business. d. Moving and transport business. e. Software cons...