Questions from Taxation

Q: Ms. Ray is age 46 and single. Her employer made

Ms. Ray is age 46 and single. Her employer made a $2,895 contribution to her qualified profit-sharing plan account, and she made the maximum contribution to her traditional IRA. Compute her IRA deduct...

Q: Mrs. Flay, age 57, participates in the group term

Mrs. Flay, age 57, participates in the group term life insurance plan sponsored by her corporate employer. According to Treasury tables, the cost of $1,000 of life insurance for a 57-year-old person i...

Q: Ms. Shaver, who has a 32 percent marginal tax rate

Ms. Shaver, who has a 32 percent marginal tax rate on ordinary income, owns Benbow Inc. preferred stock in her investment portfolio. Her Form 1099 reported that she earned $19,580 qualified dividend i...

Q: On February 13, Mr. Dega invested $75,000

On February 13, Mr. Dega invested $75,000 in TIPS paying 3.5 percent yearly interest. During the year, Mr. Dega received two cash interest payments totaling $2,742. On December 31, the adjusted princi...

Q: Sixteen years ago, Ms. Cole purchased a $500,

Sixteen years ago, Ms. Cole purchased a $500,000 insurance policy on her own life and named her son as sole beneficiary. She has paid $31,280 total premiums to keep this policy in force. a. This year,...

Q: Ira Munro owns a life insurance policy that will pay $750

Ira Munro owns a life insurance policy that will pay $750,000 to his granddaughter Ginnie upon Ira’s death. To date, Ira has paid $69,200 total premiums on the policy, which has a current cash surrend...

Q: Ten years ago, Mr. Pott paid $8 per share

Ten years ago, Mr. Pott paid $8 per share for 1,800 shares of Drago stock. Mr. Pott learned that Drago is in bankruptcy and can pay only 30 percent of its debt. What are the tax consequences to Mr. Po...

Q: Three years ago, Mrs. Gattis loaned $10,000

Three years ago, Mrs. Gattis loaned $10,000 to Mr. Wren in return for his interest-bearing note. She made the loan to enable him to begin his own business. This year, Mr. Wren informed Mrs. Gattis tha...

Q: Refer to the facts in problem 10. In its second year

Refer to the facts in problem 10. In its second year of operations, XYZ manufactured 2,000 units of product and incurred $410,000 direct material cost and $275,000 direct labor costs. For financial st...

Q: Mrs. Beard recognized a $12,290 capital loss on

Mrs. Beard recognized a $12,290 capital loss on the sale of corporate stock this year. How much loss can she deduct in each of the following cases? a. She had no other capital transactions this year....