Questions from Taxation

Q: Which has the greater chance of audit: a Form 1040 with

Which has the greater chance of audit: a Form 1040 with $200,000 AGI, all of which is salary income, or a Form 1040 with $200,000 AGI, all of which is net profit from a sole proprietorship?

Q: People frequently sell used appliances, old furniture and clothing, books

People frequently sell used appliances, old furniture and clothing, books, toys, and other personal goods through an online service such as Craigslist or eBay. Should these people recognize the cash p...

Q: If an individual purchases property insurance on business equipment, the premiums

If an individual purchases property insurance on business equipment, the premiums are deductible, but if that same individual purchases property insurance on his home, the premiums are nondeductible....

Q: Mrs. NM received a letter from the IRS asking her to

Mrs. NM received a letter from the IRS asking her to submit written substantiation of a $1,500 charitable contribution deduction. Discuss the probable tax consequences to Mrs. NM if: a. She sends the...

Q: Last year, both the Burton family and the Award family incurred

Last year, both the Burton family and the Award family incurred $8,000 unreimbursed medical expenses. Mr. and Mrs. Burton deducted $6,000 of their expenses, but Mr. and Mrs. Award were unable to deduc...

Q: Using an electronic tax library that contains IRS publications, determine the

Using an electronic tax library that contains IRS publications, determine the purpose of Publication 334, Publication 504, and Publication 907.

Q: Mr. Clark Besson is undergoing extensive chemotherapy treatment for cancer.

Mr. Clark Besson is undergoing extensive chemotherapy treatment for cancer. His oncologist recommended that he ingest marijuana to relieve the painful side effects. However, possession or use of marij...

Q: Zucker Inc. uses a fiscal year as the taxable year for

Zucker Inc. uses a fiscal year as the taxable year for filing its Form 1120. a. If Zucker’s fiscal year ends on March 31, what is the filing date and the extended filing date for Zucker’s Form 1120 fo...

Q: Marcy Tucker received the following items this year. Determine to what

Marcy Tucker received the following items this year. Determine to what extent each item is included in her AGI. a. A $25,000 cash gift from her parents. b. A $500 cash award from the local Chamber of...

Q: Percy Wilson is a calendar year taxpayer. What is the unextended

Percy Wilson is a calendar year taxpayer. What is the unextended filing date of Percy Wilson’s 2018 federal income tax return if: a. Percy Wilson Inc. is a corporation? b. Mr. Percy Wilson is an indiv...