Question: Fisafolia Corporation has gross income from

> Charlie’s Green Lawn Care is a cash basis taxpayer. Charlie Adame, the sole proprietor, is considering delaying some of his December 2019 customer billings for lawn care into the next year. In addition, he is thinking about paying some of the bills in la

> In 2019, Gale and Cathy Alexander hosted an exchange student, Axel Muller, for 9 months. Axel was part of International Student Exchange Programs (a qualified organization). Axel attended tenth grade at the local high school. Gale and Cathy did not claim

> While preparing Massie Miller’s 2019 Schedule A, you review the following list of possible charitable deductions provided by Massie: What would you say to Massie regarding her listed deductions? How much of the deduction is allowed for

> In 2019, Lou has a salary of $53,300 from her job. She also has interest income of $1,600 and dividend income of $400. Lou is single and has no dependents. During the year, Lou sold silver coins held as an investment for a $7,000 loss. Calculate the foll

> Leslie is a single taxpayer who is under age 65 and in good health. For 2019, she has a salary of $24,000 and itemized deductions of $1,000. Leslie allows her mother to live with her during the winter months (3–4 months per year), but her mother provides

> John Williams (birthdate August 2, 1976) is a single taxpayer. John’s earnings and withholdings as the manager of a local casino for 2019 are reported on his Form W-2: John’s other income includes interest on a savings

> Patty Banyan is a single taxpayer (birthdate May 18, 1992) living at 543 Space Drive, Houston, TX 77099. Her Social Security number is 466-33-1234. For 2019, Patty has no dependents, and her W-2, from her job at a local restaurant where she parks cars, c

> 2. Jason and Mary are married taxpayers in 2019. They are both under age 65 and in good health. For 2019 they have a total of $41,000 in wages and $700 in interest income. Jason and Mary’s deductions for adjusted gross income amount to $5,000 and their i

> Indicate whether each of the items listed below would be included (I) in or excluded (E) from gross income for the 2019 tax year. a. Welfare payments b. Commissions c. Hobby income d. Scholarships for room and board e. $300 set of golf clubs, an em

> Linda and Richard are married and file a joint return for 2019. During the year, Linda, who works as an accountant for a national airline, used $2,100 worth of free passes for travel on the airline; Richard used the same amount. Linda and Richard also us

> Ellen is a single taxpayer. Ellen’s employer pays $150 per month ($1,800 this year) for her health insurance. During the year, Ellen had medical expenses of $3,500 and the insurance company paid $2,000 of the expenses. How much of the above amounts, if a

> Skyler is covered by his company’s health insurance plan. The health insurance costs his company $9,500 a year. During the year, Skyler is diagnosed with a serious illness and health insurance pays $100,000 for surgery and treatment. How much of the insu

> Kristen, a single taxpayer, receives two 2019 Forms W-2 from the two employers she worked for during the year. One Form W-2 lists her wages in Boxes 1, 3, and 5 as $18,700. Her other employer’s Form W-2 has $43,000 in Box 1 but only $46,500 in both Box 3

> Arlen is required by his 2019 divorce agreement to pay alimony of $2,000 a month and child support of $2,000 a month to his ex-wife Jane. What is the tax treatment of these two payments for Arlen? What is the tax treatment of these two payments for Jane?

> Answer the following questions: a. Under a 2017 divorce agreement, Joan is required to pay her ex-husband, Bill, $700 a month until their daughter is 18 years of age. At that time, the required payments are reduced to $450 per month. 1. How much of each

> During the 2019 tax year, Brian, a single taxpayer, received $7,400 in Social Security benefits. His adjusted gross income for the year was $14,500 (not including the Social Security benefits) and he received $30,000 in tax-exempt interest income and has

> Lydia, a married individual, was unemployed for a few months during 2019. During the year, she received $3,250 in unemployment compensation payments. How much of her unemployment compensation payments must be included in gross income?

> Skylar and Walter Black have been married for 25 years. They live at 883 Scrub Brush Street, Apt. 52B, Las Vegas, NV 89125. Skylar is a stay-at-home parent and Walt is a high school teacher. Skylar’s Social Security number is 222-43-769

> In 2019, Van receives $20,000 (of which $4,000 is earnings) from a qualified tuition program. He uses the funds to pay for his college tuition and other qualified higher education expenses. How much of the $20,000 is taxable to Van?

> Jose paid the following amounts for his son to attend Big State University in 2019: How much of the above is a qualified higher education expense for purposes of his Qualified Tuition Program?

> As part of the property settlement related to their divorce, Cindy must give Allen the house that they have been living in, while she gets 100 percent of their savings accounts. The house was purchased for $90,000 20 years ago in Southern California and

> Go to the Turbo Tax Blog (http://blog.turbotax.intuit.com/) and search the blog for an article on the deduction of student loan interest. What is the maximum deduction that can be taken in a year?

> Go to the IRS website (www.irs.gov) and print out a copy of the most recent Schedule F of Form 1040.

> Go to the IRS website (www.irs.gov/newsroom) and note the name of the most recent news release.

> Greg died on July 1, 2019, and left Lea, his wife, a $45,000 life insurance policy which she elects to receive at $9,000 per year plus interest for 5 years. In the current year, Lea receives $9,500. How much should Lea include in her gross income?

> For each of the following independent cases, indicate the amount of gross income that must be included on the taxpayer’s 2019 income tax return. a. Malchia won a $4,000 humanitarian award. b. Rob won a new automobile (with a sticker price of $15,700 and

> In June of 2019, Kevin inherits stock worth $125,000. During the year, he collects $5,600 in dividends from the stock. How much of these amounts, if any, should Kevin include in his gross income for 2019? Why?

> What is the total dollar amount of personal and dependency exemptions which a married couple with two children (ages 11 and 14, both of which are qualified children) and $80,000 of adjusted gross income would deduct in 2019? What is the total child and o

> Abigail (Abby) Boxer is a single mother (birthdate April 28, 1981) working as a civilian accountant for the U.S. Army. Her Social Security number is 676-73-3311 and she lives at 3456 S Career Avenue, Sioux Falls, SD 57107. Helen, Abby’s

> In each of the following situations, determine whether the taxpayer(s) has/have a dependent and if so, the total amount of child tax credit and other dependent credit (assuming no limitations apply). a. Donna, a 20-year-old single taxpayer, supports her

> Sally and Charles Heck received the following Form 1099-DIV in 2019: The Hecks also received the following dividends and interest in 2019 (Forms 1099-DIV not shown): Assuming the Hecks file a joint tax return, complete Schedule B of Form 1040 for them fo

> Ellen’s tax client, Tom, is employed at a large company that offers health care flexible spending accounts to its employees. Tom must decide at the beginning of the year whether he wants to put as much as $2,700 of his salary into the health care flexibl

> How are qualified dividends taxed in 2019? Please give the rates of tax which apply to qualified dividends, and specify when each of these rates applies.

> Jessica and Carl were married on July 1, 2019. What are their options for filing status for their 2019 taxes?

> Melissa and Aaron are married taxpayers with taxable income of $105,000. a. When you calculate their tax liability, are you required to use the tax tables or the tax rate schedules, or does it matter? b. What is their 2019 tax liability?

> For each of the following cases, indicate the filing status for the taxpayer(s) for 2019 using the following legend: A – Single B – Married filing a joint return C – Married filing separate returns D – Head of household E - Qualifying widow(er) Case: a.

> Determine from the tax table in Appendix A the amount of the income tax for each of the following taxpayers for 2019:

> For each of the following situations (none of the taxpayers claim dependents), indicate whether the taxpayer(s) is (are) required to file a tax return for 2019. Explain your answer. a. Helen is a single taxpayer with interest income in 2019 of $8,750. b.

> Nicoula is a server at a La Jolla restaurant. Nicoula received $1,200 in unreported tips during 2019 and owes Social Security and Medicare taxes on these tips. Her total income for the year, including the tips, is $4,300. Is Nicoula required to file an i

> David Fleming is a single taxpayer living at 169 Trendie Street, Apartment 6B, La Jolla, CA 92037. His Social Security number is 865-68-9635 and his birthdate is September 18, 1974. David was employed as a delivery person for a local pizza restaurant. Da

> How much of each of the following is taxable? a. Cheline, an actress, received a $6,400 gift bag for attending the Academy Awards Ceremony during 2019. b. Jon received a gold watch worth $660 for 25 years of service to his accounting firm (not a qualifie

> Frank, age 35, and Joyce, age 34, are married and file a joint income tax return for 2019. Their salaries for the year total $84,800 and they have taxable interest income of $3,900. They have no deductions for adjusted gross income. Their itemized deduct

> Jim, age 50, and Martha, age 49, are married with three dependent children. They file a joint return for 2019. Their income from salaries totals $49,500, and they received $10,125 in taxable interest, $5,000 in royalties, and $3,000 in other ordinary inc

> Jonathan is a 35-year-old single taxpayer with adjusted gross income in 2019 of $46,300. He uses the standard deduction and has no dependents. a. Calculate Jonathan’s taxable income. Please show your work. b. When you calculate Jonathan’s tax liability a

> Alicia, age 27, is a single, full-time college student. She earns $13,200 from a part-time job and has taxable interest income of $1,450. Her itemized deductions are $845. Calculate Alicia’s taxable income for 2019. (Please note: Chapter 6 will cover the

> Ulysses and Penelope are married and file separate returns for 2019. Penelope itemizes her deductions on her return. Ulysses’ adjusted gross income was $17,400, his itemized deductions were $2,250. Neither have any dependents. Calculate Ulysses’ income t

> Diego, age 28, married Dolores, age 27, in 2019. Their salaries for the year amounted to $47,230 and they had interest income of $3,500. Diego and Dolores’ deductions for adjusted gross income amounted to $2,000, their itemized deductions were $16,000, a

> Indicate the date that the statute of limitations would run out on each of the following 2018 individual tax returns: a. A fraudulent tax return that was filed April 15, 2020 b. A tax return that was filed May 19, 2020 c. A tax return that was filed Febr

> In the 2019 tax year, Michelle paid the following amounts relating to her 2017 tax return: Which of the above items may be deducted on Michelle’s 2019 individual income tax return? Explain?

> Warner and Augustine Robins, both 33 years old, have been married for 9 years and have no dependents. Warner is the president of Dragon Lady Corporation located in Macon. The Dragon Lady stock is owned 40 percent by Warner, 40 percent by Augustine, and 2

> For its current tax year, Ilex Corporation has ordinary income of $260,000, a short-term capital loss of $60,000, and a long-term capital gain of $20,000. Calculate Ilex Corporation’s tax liability for 2019.

> Ulmus Corporation is an engineering consulting firm and has $1,120,000 in taxable income for 2019. Calculate the corporation’s income tax liability for 2019.

> Go to the IRS website (www.irs.gov) and determine which IRS publication addresses the topic of corporate taxation. Print out the page with the Table of Contents of this IRS publication.

> Cypress Corporation, a calendar year end corporation, has an AMT credit carryforward from 2018 (the credit arose in 2017) in the amount of $43,000. In 2019, Cypress has $170,000 of taxable income. Assuming Cypress is not a personal service corporation, w

> Bill and Guilda each own 50 percent of the stock of Radiata Corporation, an S corporation. Guilda’s basis in her stock is $21,000. On May 26, 2019, Bill sells his stock, with a basis of $40,000, to Loraine for $50,000. For the 2019 tax year, Radiata Corp

> Cedar Corporation has an S corporation election in effect. During the 2019 calendar tax year, the corporation had ordinary taxable income of $200,000, and on January 15, 2019, the corporation paid dividends to shareholders in the amount of $120,000. How

> Mallory Corporation has a calendar year-end. The corporation has paid estimated taxes of $10,000 during 2019 but still owes an additional $5,000 for its 2019 tax year. a. When is the 2019 tax return due? b. If an automatic extension of time to file is r

> Quince Corporation has taxable income of $485,000 for its calendar tax year. Calculate the corporation’s income tax liability for 2019 before tax credits.

> L&J Interests is a partnership with two equal partners, Linda and Joanne. The partnership has income of $75,000 for the year before guaranteed payments. Guaranteed payments of $45,000 are paid to Linda during the year. Calculate the amount of income that

> Go to the IRS website (www.irs.gov) and print pages 1 and 2 of Schedule K-1 (Form 1065), Partner’s Share of Income, Deductions, Credits, etc. Review the different elements of income which must be passed through to each partner and be reported as separate

> John Fuji (birthdate June 6, 1981) moved from California to Washington in December 2018. His earnings and income tax withholding for 2019 for his job as a manager at a Washington apple-processing plant are: John’s other income includes

> Wilson has a 40 percent interest in the assets and income of the CC&W Partnership, and the basis in his partnership interest is $45,000 at the beginning of 2019. During 2019, the partnership’s net loss is $60,000 and Wilson’s share of the loss is $24,000

> Martha, Steve, and Lew form a partnership to operate a grocery store. For each of the following contributions by the partners, indicate (1) the amount of income or gain recognized, if any, by the partner, and (2) the partner’s basis in the partnership in

> Van makes an investment in an LLC in 2019. Van’s capital contributions to the LLC consist of $30,000 cash and a building with an adjusted basis of $70,000, subject to a nonrecourse liability (seller financing) of $20,000. Calculate the amount that Van ha

> Van makes an investment in a partnership in 2019. Van’s capital contributions to the partnership consist of $30,000 cash and a building with an adjusted basis of $70,000, subject to a nonrecourse liability (seller financing) of $20,000. a. Calculate the

> Janie owns a 40 percent interest in Chang Partnership. Chang has W-2 wages of $50,000 and qualified property of $450,000 in 2019. a. When computing the W-2 wages limitation, what is the amount of wages that will be allocated to Janie? b. What is the amou

> Quince Interests is a partnership with a tax year that ends on September 30, 2019. During that year, Potter, a partner, received $3,000 per month as a guaranteed payment, and his share of partnership income after guaranteed payments was $23,000. For Octo

> Thuy worked as the assistant manager at Burger Crown through August 2019 and received wages of $79,000. Thuy then worked at Up and Down Burger starting in September of 2019 and received wages of $61,500. Calculate the amount of Thuy’s overpayment of Soci

> Fiduciary Investments paid its employee, Yolanda, wages of $139,000 in 2019. Calculate the FICA tax: Withheld from Yolanda’s wages: Social Security? Medicare? Paid by Fiduciary: Social Security? Medicare? Total FICA Tax?

> Lamden Company paid its employee, Trudy, wages of $52,000 in 2019. Calculate the FICA tax: Withheld from Trudy’s wages: Social Security? Medicare? Paid by Lamden: Social Security? Medicare?

> Kana is a single wage earner with no dependents and taxable income of $205,000 in 2019. Her 2018 taxable income was $155,000 and tax liability were $31,490. Calculate the following: Kana’s 2019 income tax liability? Kana’s minimum required 2019 annual pa

> In 2019, Professor Patricia (Patty) Pâté retired from the Palm Springs Culinary Arts Academy (PSCAA). She is a single taxpayer and is 62 years old. Patty lives at 98 Colander Street, Apt. 206D, Henderson, NV 89052. Professor P&A

> Sherina Smith (Social Security number 785-23-9873) lives at 536 West Lapham Street, Milwaukee, WI 53204, and is self-employed for 2019. She estimates her required annual estimated tax payment for 2019 to be $8,468. She had a $417 overpayment of last year

> Sophie is a single taxpayer. For the first payroll period in July 2019, she is paid wages of $2,200 monthly. Sophie claims one allowance on her Form W-4. a. Use the percentage method to calculate the amount of Sophie’s withholding for a monthly pay peri

> Ralph and Kathy Gump are married with one 20-year-old dependent child. Ralph earns a total of $98,000 and estimates their itemized deductions to be $29,500 for the year. Kathy is not employed. Use Form W-4 on Pages 9-35 and 9-36 to determine the number o

> Telly, age 38, has a $140,000 IRA with Blue Mutual Fund. He has read good things about the management of Green Mutual Fund, so he opens a Green Fund IRA. Telly asked for a distribution rollover and received his balance from the Blue Fund on May 1, 2019.

> Thomas is an employer with two employees, Patty and Selma. Patty’s wages are $12,450 and Selma’s wages are $1,310. The state unemployment tax rate is 5.4 percent. Calculate the following amounts for Thomas: a. FUTA tax before the state tax credit b. Stat

> Philcon Corporation created the following 2019 employee payroll report for one of its employees. a. Complete the following Form W-2 for Louise Chugach from Philcon Corporation. b. Philcon Corporation also paid $1,100 to Ralph Kincaid for presenting a man

> Drew Freeman operates a small business and his payroll records for the first quarter f 2019 reflect the following: Drew’s employee identification number is 34-4321321 and his business is located at 732 Nob Hill Blvd. in Yakima, WA 98902

> Phan Mai is single with two dependent children under age 17. Phan estimates her wages for the year will be $42,000 and her itemized deductions will be $14,000. In the previous year, Phan had a small tax liability. Assuming Phan files as head of household

> On February 2, 2019, Alexandra purchases a personal computer. The computer cost $1,800. Alexandra uses the computer 85 percent of the time in her accounting business, and the remaining 15 percent of the time for various personal uses. Calculate Alexandra

> During 2019, William purchases the following capital assets for use in his catering business: Assume that William decides to use the election to expense on the baking equipment (and has adequate taxable income to cover the deduction) but not on the autom

> Christopher Crosphit (birthdate April 28, 1977) owns and operates a health club called “Catawba Fitness.” The business is located at 4321 New Cut Road, Spartanburg, SC 29303. The principal business code is 812190 and t

> Calculate the following: a. The first year of depreciation on a residential rental building costing $250,000 purchased June 2, 2019. b. The second year (2020) of depreciation on a computer costing $5,000 purchased in May 2019, using the half-year conven

> On March 8, 2019, Holly purchased a residential apartment building. The cost basis assigned to the building is $700,000. Holly also owns another residential apartment building that she purchased on October 15, 2019, with a cost basis of $400,000. a. Cal

> Mike purchases a new heavy-duty truck (5-year class recovery property) for his delivery service on March 30, 2019. No other assets were purchased during the year. The truck is not considered a passenger automobile for purposes of the listed property and

> Carey exchanges land for other land in a qualifying like-kind exchange. Carey’s basis in the land given up is $115,000, and the property has a fair market value of $150,000. In exchange for her property, Carey receives land with a fair market value of $1

> William sold Section 1245 property for $25,000 in 2019. The property cost $38,500 when it was purchased 5 years ago. The depreciation claimed on the property was $19,200. a. Calculate the adjusted basis of the property. b. Calculate the recomputed basis

> Steve Drake sells a rental house on January 1, 2019, and receives $100,000 cash and a note for $50,000 at 7 percent interest. The purchaser also assumes the mortgage on the property of $25,000. Steve’s original cost for the house was $1

> Nadia Shalom has the following transactions during the year: Sale of office equipment on March 15 that cost $20,000 when purchased on July 1, 2017. Nadia has claimed $3,100 in depreciation and sells the asset for $13,500 with no selling costs. Sale of l

> Derek purchases a small business from Art on June 30, 2019. He paid the following amounts for the business: a. How much of the $250,000 purchase price is for Section 197 intangible assets? b. What amount can Derek deduct on his 2019 tax return as Section

> Tom has a successful business with $100,000 of taxable income before the election to expense in 2019. He purchases one new asset in 2019, a new machine which is 7-year MACRS property and costs $25,000. If you are Tom’s tax advisor, how would you advise T

> Go to the IRS website (www.irs.gov) and assuming bonus depreciation is used, redo Problem 11, using the most recent interactive Form 4562, Depreciation and Amortization. Data from Problem 11: During 2019, Pepe Guardio purchases the following property fo

> Carl Conch and Mary Duval are married and file a joint return. Carl works for the Key Lime Pie Company and Mary is a homemaker after losing her job in 2018. Carl’s birthdate is June 14, 1974 and Mary’s is October 2, 19

> During 2019, Pepe Guardio purchases the following property for use in his calendar year-end manufacturing business: Pepe uses the accelerated depreciation method under MACRS, if available, and does not make the election to expense or take bonus depreciat

> On September 14, 2019, Jay purchased a passenger automobile that is used 75 percent in his accounting business. The automobile has a basis for depreciation purposes of $40,000, and Jay uses the accelerated method under MACRS. Jay does not elect to expens

> Calculate the amount of the child and dependent care credit allowed before any tax liability limitations or other credits for 2019 in each of the following cases, assuming the taxpayers had no income other than the stated amounts. a. William and Carla f

> Diane is a single taxpayer who qualifies for the earned income credit. Diane has two qualifying children who are 3 and 5 years old. During 2019, Diane’s wages are $18,900 and she receives dividend income of $900. Calculate Diane’s earned income credit us

> George and Amal file a joint return in 2019 and have AGI of $39,800. They each make a $1,600 contribution to their respective IRAs. Assuming that they are not eligible for any other credits, what is the amount of their Saver’s Credit?

> In 2019, Jeff spends $6,000 on solar panels to heat water for his main home. What is Jeff’s credit for his 2019 purchases?