Questions from Taxation

Q: A revenue agent determined that Ms. Owen understated her tax by

A revenue agent determined that Ms. Owen understated her tax by $48,100 and concluded that $9,200 was caused by her inadequate record keeping while the remainder was caused by her misapplication of a...

Q: Mr. Davis filed a delinquent tax return on July 27.

Mr. Davis filed a delinquent tax return on July 27. The return reflected $3,700 total tax, $4,000 withholding, and a $300 refund due. Compute his late-filing penalty.

Q: Mr. Curtis paid the following taxes. Federal income

Mr. Curtis paid the following taxes. Federal income tax…………………………………………………………$50,789 Federal gift tax………………………………………………………………………285 Federal employer payroll tax for housekeeper…………………………..920 Indiana...

Q: Mrs. Stuart paid the following taxes. Local property

Mrs. Stuart paid the following taxes. Local property tax on: 20 acres of land held for investment…………….$ 1,500 Condominium used as principal residence……….2,825 Sailboat used as vacation residence…………...

Q: The revenue agent who audited Ms. Hsui’s Form 1040 discovered that

The revenue agent who audited Ms. Hsui’s Form 1040 discovered that she had claimed a $15,250 deduction that wasn’t allowed by the tax law. The improper deduction reduced Ms. Hsui’s tax by $5,033. Her...

Q: Mr. and Mrs. Pratt failed to apply for an extension

Mr. and Mrs. Pratt failed to apply for an extension of time to file their 2017 Form 1040 and didn’t mail the return to the IRS until May 29, 2018. Assuming the Pratts had no excuse for filing a delinq...

Q: Mary Vale contributed a bronze statuette to a local museum. Mary

Mary Vale contributed a bronze statuette to a local museum. Mary received the statuette as a gift from her grandmother 35 years ago, and her tax basis was only $200. However, the statue’s appraised fa...

Q: Wealthy individuals can reduce their taxable estate by donating property to charity

Wealthy individuals can reduce their taxable estate by donating property to charity either during life or at death. Discuss the reasons why an inter vivo charitable donation is the preferable option f...

Q: Mrs. Leland’s profession is dentistry, but she has quite a

Mrs. Leland’s profession is dentistry, but she has quite a reputation as a master gardener. Last year she won $990 in prize money from entering her roses in competitions and earned $800 in lecture fee...

Q: Mr. and Mrs. Remy have the following allowable itemized deductions

Mr. and Mrs. Remy have the following allowable itemized deductions this year. Medical expenses……………………………………..$2,310 State and local taxes……………………………………4,019 Casualty loss………………………………………………8,000 Char...