Questions from Taxation

Q: Adams Corporation manufactures appliances. This year, the government increased the

Adams Corporation manufactures appliances. This year, the government increased the corporate tax rate by 5 percent. Adams responded by raising its prices. Customer demand remained steady; therefore, A...

Q: Shine Inc. manufactures laundry detergent and other cleaning products. This

Shine Inc. manufactures laundry detergent and other cleaning products. This year, the government increased the corporate tax rate by 2 percent. The marketing department determined that Shine could not...

Q: In its first year, Barsky Corporation made charitable contributions totaling $

In its first year, Barsky Corporation made charitable contributions totaling $30,000. The corporation’s taxable income before any charitable contribution deduction was $250,000. In its second year, Ba...

Q: During a recent IRS audit, the revenue agent determined that Level

During a recent IRS audit, the revenue agent determined that Level Corporation meets the definition of a personal holding company. If Level’s undistributed after-tax income last year was $670,000, com...

Q: Firm B, a calendar year, cash basis taxpayer, leases

Firm B, a calendar year, cash basis taxpayer, leases lawn and garden equipment. During December, it received the following cash payments. To what extent does each payment represent current taxable inc...

Q: Grant and Marvin organized a new business as a corporation in which

Grant and Marvin organized a new business as a corporation in which they own equal interests. The new business generated a $65,000 operating loss for the year. a. Assume the corporation expects to gen...

Q: Refer to the facts in the preceding problem. Briefly explain the

Refer to the facts in the preceding problem. Briefly explain the payroll tax consequences of the revenue agent’s conclusions. Data from Problem 19: Graham is the sole shareholder of Logan Corporatio...

Q: Ms. Kona owns a 10 percent interest in Carlton LLC.

Ms. Kona owns a 10 percent interest in Carlton LLC. This year, the LLC generated $72,400 ordinary income. Ms. Kona’s marginal tax rate is 32 percent, and she does not pay SE tax on her LLC income. a....

Q: Refer to the facts in the preceding problem. How would your

Refer to the facts in the preceding problem. How would your answer change if Zenon conducted its foreign operations through a foreign subsidiary that made no shareholder distributions during the curre...

Q: Refer to the facts in the preceding problem. Compute U.

Refer to the facts in the preceding problem. Compute U.S. income tax if Jackson conducted its foreign operations through a foreign subsidiary that made no shareholder distributions during the current...