Questions from Taxation

Q: Mr. and Mrs. Velotta are self-employed professional musicians

Mr. and Mrs. Velotta are self-employed professional musicians. Their average annual income from performance fees and music lessons is $130,000. The couple wants to shift income to their two children,...

Q: Describe the FICA payroll tax implications when the IRS classifies a portion

Describe the FICA payroll tax implications when the IRS classifies a portion of a salary payment to a shareholder/employee as a constructive dividend.

Q: Why are publicly held corporations such as General Motors generally immune from

Why are publicly held corporations such as General Motors generally immune from the accumulated earnings tax?

Q: Mr. and Mrs. Barnes own a fast-food restaurant

Mr. and Mrs. Barnes own a fast-food restaurant that generates $160,000 average annual income. The couple wants to shift some of this income to their two children, ages 19 and 22. Can Mr. and Mrs. Barn...

Q: Ms. Johnson is eager to create a family partnership to generate

Ms. Johnson is eager to create a family partnership to generate income and cash flow for her three college-aged children. She owns two businesses, either of which could be organized as a partnership....

Q: BNC, a closely held corporation, was organized in 1987.

BNC, a closely held corporation, was organized in 1987. To date, it has accumulated more than $10 million after-tax income. This year, BNC’s taxable income is $750,000, and its federal tax is $255,000...

Q: Why does a corporation’s state income tax cost depend on its marginal

Why does a corporation’s state income tax cost depend on its marginal income tax rate for federal purposes?

Q: Firm H operates its business in State H, which levies a

Firm H operates its business in State H, which levies a 6 percent sales and use tax. This year, the firm purchased a $600,000 item of tangible property in State K and paid $18,000 sales tax to the sta...

Q: Assuming a 21 percent tax rate, compute the after-tax

Assuming a 21 percent tax rate, compute the after-tax cost of the following business expenditures: a. $20,000 cost of equipment subject to Section 179 election. b. $17,500 business expansion costs. c....

Q: In what situation is the United States a tax haven for an

In what situation is the United States a tax haven for an international business operation?