Question: Jane and Robert Brown are married and

> Discuss the major reasons for the growth of the Euro market. What is an offshore center? Name the major participants in the Euro market.

> From the point of view of a U.S.-based MNC, what key tax factors need to be considered?

> What is a joint venture? Why is it often essential to use this arrangement? What effect do joint-venture laws and restrictions have on the operation of foreign-based subsidiaries?

> What are the important international trading blocs? What is the European Union, and what is its single unit of currency? What is GATT? What is the WTO?

> All-Stores Inc. is a holding company that has voting control over both General Stores and Star Stores. All-Stores owns General Stores and Star Stores common stock valued at $15,000 and $12,000, respectively. General’s balance sheet lists $130,000 of tota

> Phylum Plants’ stock is currently trading at a price of $55 per share. The company is considering the acquisition of Taxonomy Central, whose stock is currently trading at $20 per share. The transaction would require Phylum to swap its shares for those of

> Willow Enterprises is considering the acquisition of Steadfast Corp. in a stock swap transaction. Currently, Willow’s stock is selling for $45 per share. Although Steadfast’s shares are currently trading at $30 per share, the firm’s asking price is $60 p

> You have been made treasurer for a day at AIMCO, which develops technology for video conferencing. A manager of the satellite division has asked you to authorize a capital expenditure in the amount of $100,000. The manager states that this expenditure is

> Santana Music is a U.S.-based MNC whose foreign subsidiary had pretax income of $55,000; all after-tax income is available in the form of dividends to the parent company. The local tax rate is 40%, the foreign dividend withholding tax rate is 5%, and the

> Based on the facts and results of Problems 30-32, determine Relix's change in net deferred tax asset or net deferred tax liability for the current year. Provide the journal entry to record this amount. Data from Problem 30: Relix, Inc., is

> Based on the facts and results of Problem 30 and the beginning-of-the-year book-tax basis differences listed below, determine the change in Relix's deferred tax liabilities for the current year. Data from Problem 30: Relix, Inc., is a domes

> Based on the facts and results of Problem 30 and the beginning-of-the year book-tax basis differences listed below, determine the change in Relix's deferred tax assets for the current year. Data from Problem 30: Relix, Inc., is a domestic corporation

> Relix, Inc., is a domestic corporation with the following balance sheet for book and tax purposes at the end of the year. Based on this information, determine Relix's net deferred tax asset or net deferred tax liability at year-end. Assume a 21% Federal

> Continue with the results of Problem 28. Prepare the GAAP journal entries for Willingham's income tax expense. Data from Problem 28: Willingham, Inc., an accn1al basis C corporation, reports pretax book income of $1.6 million. At the beginning of the t

> Rubio, Inc., an accrual basis C corporation, reports tl1e following amounts for tl1e tax year. The applicable income tax rate is 30%. Compute Rubio's taxable income. Book income, including the items below $80,000 Increase in book allowance for antic

> Continue with the results of Problem 24. Prepare the GAAP journal entries for Britton's year 1 income tax expense. Data from Problem 24: Britton, Inc., an accrual basis C corporation, sells widgets on credit. Its book and taxable income for year 1 tota

> Britton, Inc., an accrual basis C corporation, sells widgets on credit. Its book and taxable income for year 1 totals $60,000 before accounting for bad debts. Britton's book allowance for uncollectible accounts increased for year 1 by $10,000, but none o

> Continue with the results of Problem 22. Prepare the GAAP journal entries for Phillips's year 1 income tax expense. Data from Problem 22: Phillips, Inc., a cash basis C corporation, completes $100,000 in sales for year 1, but only $75,000 of this amoun

> In the current year, Dickinson, Inc., reports an effective tax rate of 36%, and Badger, Inc., reports an effective tax rate of 21%. Both companies are don1estic and operate in the same industry. Your initial examination of the financial statements of the

> Five years ago, Bridget decided to purchase a limited partnership interest in a fast-food restaurant conveniently located near the campus of Southeast State University. The general partner of the restaurant venture promised her that the investment would

> HippCo and HoppCo operate in the same industry and report the following tax rate reconciliations in their tax footnotes. Compare and contrast the effective tax rates of these two con1panies. HippCo НoppCo Hypothetical tax at U.S. rate 35.0% 35.0% St

> Jill i5 the CFO of PorTech, Inc. PorTech's tax advisers have recommended two tax Decision Making planning ideas that will each provide $5 million of current-year cash tax savings. One idea is based on a timing difference and is expected to reverse in ful

> You saw on the Business News Today blog that YoungCo has "released one third of its valuation allowances because of an upbeat forecast for sales of its tablet computers over the next 30 months." What effect does such a release likely have on YoungCo's cu

> Using the facts of Problem 14, detern1ine the following. a. The 2019 end-of-year balance in Mini's deferred tax asset and deferred tax liability balance sheet accounts. b. The cost to Mini of the deferral of the bad debt deduction, considering the time v

> Mini, in Problem 12, reports $800,000 of pretax book net income in 2019. For that year, Mini did not deduct any bad debt expense for book purposes but did deduct $15,000 in bad debt expense for tax purposes. Mini reports no other temporary or permanent d

> Using the facts of Problem 10, determine the following. a. The 2019 end-of-year balance in Prance's deferred tax asset and deferred tax liability balance sheet accounts. b. The value to Prance of d1e accelerated tax deduction for depreciation, consideri

> Locate the following Code provisions, and give a brief description of each Communications in an e-mail to your instructor. a. § 6l (a)(l3). b. § 643(a)(2). c. § 2503(g)(2)(A).

> Is there an auton1atic right to appeal to the U.S. Supreme Court? If so, what is the process?

> In the citation Schuster's Express, Inc., 66 T.C. 588 (1976), aff'd 562 F.2d 39 (CA-2, 1977), nonacq., to what do the 66, 39, and nonacq. refer?

> Discuss the probable non-revenue justifications for each of the following provisions of the tax law. a. A tax credit allowed for electricity produced from renewable sources. b. A tax credit allowed for the purchase of a motor vehicle that operates on al

> Ruth Ames died on January IO, 2018. In filing the estate tax return, her executor, Melvin Sims, elects the primary valuation date and amount (fair market value on the date of death). On March 12, 2018, Melvin invests $30,000 of cash that Ruth had in her

> A disproportionate amount of the Federal income tax is paid by individuals Communications at upper income levels. Is this a desirable condition? Defend your position in no more than three PowerPoint slides, to be presented to your Business Economics clas

> Ashley runs a small business in Boulder, Colorado, that makes snow skis. She expects the business to grow substantially over the next three years. Because she is concerned about product liability and is planning to take the company public in year 2, she

> LaceCo has adopted certain aggressive policies concerning it5 transfer pricing procedures. The entity estimates that it will reduce its Federal income tax liability by $400,000 as a result of these strategies, but that the IRS is likely to challenge die

> On May 28, 2018, J\1ary purchased and placed in service a new $20,000 car. The car was used 600A. for business, 200A. for production of income, and 200/o for personal use in 2018. In 2019, the usage changed to 400/o for business, 300A. for production of

> On June 5, 2017, Leo purchased and placed in service a new car that cost $20,000. The business use percentage for the car is always 100%.. Leo claims any available additional first-year depreciation. Compute Leo's cost recovery deduction for 2017 and 201

> On October 15, 2018, Jon purchased and placed in service a used car. The purchase price was $25,000. This was the only business use asset Jon acquired in 2018. He used the car 80% of the time for business and 200A. for personal use. Jon used the regular

> Jabari Johnson is considering acquiring an automobile at the beginning of 2019 that he will use 100% of the time as a taxi. The purchase price of the automobile is $35,000. Johnson has heard of cost recovery limits on automobiles and wants to know die ma

> Jamie purchased $100,000 of new office f1.1miture for her business in June of the current year. Jamie understands that if she elects to use ADS to compute her regular income tax, there will be no difference between the cost recovery for computing the reg

> In January 2018, Pelican, Inc., established an allowance for uncollectible accounts (bad debt reserve) of $70,000 on its books and increased the allowance by S 120,000 during the year. As a result of a client's bankruptcy, Pelican, Inc., decreased the al

> On June 5, 2017,Javier Sanchez purchased and placed in service a 7-year class asset costing $560,000 for use in his landscaping business, which he operates as a single member LLC (Sanchez Landscaping LLC). During 2017, his business generated a net income

> During 2018, John was the chief executive officer and a shareholder of Maze, Inc. He owned 60% of the outstanding stock of Maze. In 2015, John and Maze, as co-borrowers, obtained a $100,000 loan from United National Bank. This loan was secured by John's

> Dove Corporation, a calendar year C corporation, had the following information for 2018: Based on the above information, use Schedule M-2 of Form 1120 (see Example 50 in the text) to determine Dove's unappropriated retained earnings balance as of Decem

> A business building owned by an individual taxpayer on which straight- Digging Deeper line depreciation of $13,000 was taken is sold on the installment basis for S 100,000 with $20,000 down and four yearly installments of $20,000 plus interest. The adjus

> The following information for 2018 relates to Sparrow Corporation, a calendar year, accrual method taxpayer. Based on the above information, use Schedule M- 1 of Form 1120, which is available on the IRS website, to determine Sparrow's taxable income fo

> Hector and Walt are purchasing the Copper Partnership from Jan and Gail for $700,000; Hector and Walt will be equal partners. During the negotiations, Jan and Gail succeeded in having the transaction structured as the purchase of the partnership rather t

> Repeat the computations of Problem 36, but now assume that State B uses a double-weighted sales factor in its apportionment formula. Data from Problem 36: PinkCo, Inc., operates in two states, both of which equally weight the three apportionment factor

> Renee and Sanjeev Patel, who are n1arried, reported taxable income of $1,008,000 for 2018. They incurred positive AMT adjustments of $75,000 and tax preference iten1s of $67,500. The couple itemizes their deductions. a. Compute the Patels' AMT! for 2018

> Pat is 40, is single, and has no dependents. She received a salary of $390,000 in 2018. She earned interest income of $11,000, dividend income of $15,000, gambling winnings of $14,000, and interest income from private activity bonds (issued in 2015) of $

> Tan1my and Willy own 40%. of the stock of Roadn1nner, an S corporation. The other 60"A. is owned by 99 other shareholders, all of whom are single and unrelated. Tamn1y and Willy have agreed to a divorce and are in the process of negotiating a property se

> Included in Alice's regular taxable income and in her AMT base is a $300,000 capital gain on the sale of stock she owned for three years. Alice is in the 20% tax bracket for net capital gains for regular incon1e tax purposes. a. What rate should Alice us

> Esther owns a large home on the East Coast. Her home is surrounded by large, mature oak trees that significantly increase the value of her home. In August 2017, a hurricane damaged many of the trees surrounding her home; her region was declared a Federal

> Chuck is single, has no dependents, and does not itemize deductions. In 2018, he reports taxable income of $320,000. His tax preferences total $51,000. What is Chuck's AMTI for 2018?

> Gabriel, age 40, and Emma, age 33. are married with two dependents. They recorded AG! of $250,000 in 2018 that included net investment income of $3,000 and gambling winnings of $2,500. The couple incurred the following expenses during the year (all of wh

> Ann and Bill were on the list of a local adoption agency for several years, seeking to adopt a child. Finally, in 2017, good news comes their way, and an adoption seems imminent. They paid qualified adoption expenses of $5,000 in 2017 and $11,000 in 2018

> Rover Corporation would like to transfer excess cash to its sole shareholder, Aleshia, who is also an employee. Aleshia is in the 24% tax bracket, and Rover is in the 21 % bracket. Because Aleshia's contribution to Rover's profit is substantial, Rover be

> Turtle, a C corporation, reports taxable income of $200,000 before paying salaries to the two equal shareholder-employees, Britney and Alan. Turtle follows a policy of distributing all after-tax earnings to the shareholders. a. Determine the tax conseque

> Sammy and Monica, both age 67, incur and pay n1edical expenses in excess of insurance reimbursements during the year as follows. Sammy and Monica's 2018 AG! is $130,000. They file a joint return. Chuck and Carter are Sammy and Monica's dependents. a.

> Flicker, a single men1ber LLC, acquired a passive activity this year. Gross income from operations of the activity was S 160,000. Operating expenses, not including depreciation, were $122,000. Regular income tax depreciation of $49,750 was computed under

> Lilia is going to be subject to the AMT in 2018. She owns an investment building and is considering disposing of it and investing in other realty. Based on an appraisal of the building's value, the realized gain would be $85,000. Two individuals have ind

> Jo and Velma are equal owners of JV Company. Jo invests $500,000 cash in the venture. Velma contributes land and a building (basis to her of $125,000, fair market value of $500,000). TI1e entity then borrows $250,000 cash using recourse financing and $10

> Allie, who was an accounting major in college, is the owner of a medium-size constn1ction limited liability company. She prepares the company's Schedule C each year. Due to reporting a home construction contract using the completed contract method, the c

> Juan owns a business that acquires exotic automobiles that are high-tech, state-of-the-art vehicles with unique design features or equipment. The exotic automobiles are not licensed, nor are they set up to be used on the road. Rather, the cars are used e

> David is the sole proprietor of a real estate construction business. He uses the completed contract method on a particular contract that requires 16 months to complete. The contract is for $500,000, with estimated costs of $300,000. At the end of 2017, $

> Find a Federal or state proposal for a soda tax or sweetened beverage tax. Apply the AICPA's Principles of Good Tax Policy to support your recommendation for or against the bill.

> Taxpayers who purchase health insurance coverage through the Health Insurance Marketplace may be eligible for the premium tax credit under § 36B. Use the IRS's website (www.irs.gov) to read about this provision and determine which taxpayers are eligible

> Sarah was contemplating making a contribution to her traditional IRA in 2017. She determined she would contribute $5,000 in December 2017, but forgot about making the contribution until she was preparing her 2017 tax return in February 2018. Use the webs

> In March 2018, Helen Carlon acquired used equipment for her business at a cost of $300,000. The equipment is five-year property for regular tax depreciation purposes. a. If Helen depreciates the equipn1ent using the method that will produce the greatest

> Jacob Patterson cannot make a fully deductible $5,500 IRA contribution because his AGI exceeds the phase out range. Instead, he makes a $3,500 nondeductible IRA contribution to his traditional IRA. Determine how Jacob reports this on his tax return, and

> Teal Company, a single member LLC, owns two warehouses that were placed in service before 1987. This year, accelerated depreciation on Warehouse A is $36,000 (straight-line depreciation would have been $30,000). On Warehouse B, accelerated depreciation w

> Crane is a partner in the Cardinal Partnership. A dispute arose with the partnership regarding Crane's share of current earnings. The partnership contends that the amount is $75,000, while Crane believes his share is $100,000. Crane ceased being a partne

> The Turnaround LLC was formed several years ago. It incurred losses for several years, reducing many of its members' bases in their interests to zero. However, the business recently obtained some new and promising contracts, and there is an expectation o

> Duffy Associates is a partnership engaged in real estate developn1ent. Olinto, a civil engineer, billed Duffy $40,000 in the current year for consulting services rendered. In full settlen1ent of this invoice, Olinto accepted a $15,000 cash payment plus t

> Nick, Chris, Stacey, and Mike are each 25% partners in Liberty Partnership, a general partnership. During the current year, the partnership had revenues of $300,000 and non separately allocated business expenses of $100,000, including a guaranteed paymen

> Gray is a 50% partner in Fabco Partnership. Gray's tax basis in Fabco on January 1, year 4, was $5,000. Fabco made no distributions to the partners during year 4 and recorded the following. What is Gray's tax basis in Fabco on December 31, year 4? a. $

> Jake pays the following amounts to his former spouse during the current year: What amount can Jake deduct as alimony for the current year? Assume the divorce occurred before 2019. a. $0 b. $12,000 c. $22,000 d. $137,000 Regular alimony payments Chi

> Bill and Jane Jones were divorced on January 1, 2018. They have no children. In accordance with the divorce decree, Bill transferred the title of their house over to Jane. The home had a fair market value of $250,000 and was subject to a $100,000 mortgag

> Which of the following staten1ents is true regarding the taxation of Social Security benefits? a. 85% is the maximum amount of taxable Social Security benefits. b. 500/o is the maximum amount of taxable Social Security benefits. c. If a taxpayer's only s

> Swift Corporation agreed to redeem some of the shares of two of its shareholders. It distributed land (basis $55,000 and fair n1arket value $120,000) to Sam in exchange for part of his stock. Sam's basis in the redeemed stock was $25,000. Swift also dist

> Jane is the sole shareholder of Buttons, Inc. Buttons has accumulated earnings and profits (E & P) of $65,000 at the beginning of the current year. The current E & P is $35,000. Buttons pays out a property distribution to Jane during the current year wit

> Jane is the sole shareholder of Buttons, Inc. Buttons has a deficit of $60,000 in accumulated earnings and profits (E & P) at the beginning of the current year. Current E & P is $35,000. If Buttons pays out a cash distribution to Jane during the current

> Ridge Corp., a calendar year C corporation, made a non liquidating cash distribution to its shareholders of $1,000,000 with respect to its stock. At that time, Ridge's current and accumulated earnings and profits totaled S750,000 and its total paid-in ca

> Fox Corp. owned 2,000 shares of Duffy Corp. stock that it bought in year 0 for $9 per share. In year 8, when the fair market value of the Duffy stock was $20 per share, Fox distributed this stock to a non corporate shareholder. Fox's recognized gain on t

> On January 1, year 5, Olinto Corp., an accrual basis, calendar year C corporation, had $35,000 in accumulated earnings and profits. For year 5, Olinto had current earnings and profits of $15,000 and made two $40,000 cash distributions to its shareholders

> Hirsch, Incorporated, is a calendar year corporation that has had revenues of less than $500,000 since inception. In 2017, Hirsch had a net operating loss that \Vas able to be used in full via a carryback to 2016. For 2018, Hirsch expects to have taxable

> In the current year, Acorn, Inc., had the following items of income and expense: The dividends were received from a corporation of which Acorn owns 30%. In Acorn's current-year corporate income tax return, what amount should be reported as income befor

> Ron, David, and Mary formed Widget, Inc. Ron and David each received 40% of the stock, and Mary received the remaining 2001o. Ron contributed land with an FMV of $70,000 and an adjusted basis of $20,000. The corporation also assumed a $30,000 liability o

> Gearry and Olinto organized The Worthington Corp., which issued voting common stock with a fair market value of $240,000. They each transferred property in exchange for stock as follows: The building \Vas subject to a $20,000 mortgage that was assun1ed

> Gearry and Olinto organized The Worthington Corp., which issued voting common stock with a fair market value of $240,000. They each transferred property in exchange for stock as follows: The building was subject to a $20,000 mortgage that was assumed b

> Use the following data to calculate Chiara's AMT base in 2018. Chiara will itemize deductions and will file as a single taxpayer. Taxable income $248,000 Positive AMT adjustments 73,000 Negative AMT adjustments Preferences 25,000 30,000

> Jim spent four years earning his undergraduate degree at a local university. He began his first year of Jaw school in January of the current year. Assuming he is under the phase out limitation, what education tax credit is Jim eligible for in the current

> Which of the following credits is considered "refundable"? a. Child and dependent care credit b. Retirement plan contribution credit c. Child tax credit d. Credit for elderly

> In the current year, Wells paid the following expenses: In the current year, Wells recovered $1,500 of the $2,000 that she paid for physical therapy through insurance reimbursement from a group medical policy paid for by her employer. Disregarding the

> Ryan Ross (111-11-1112), Oscar Omega (222-22-2222), Clark Carey (333-33-3333). and Kim Kardigan (444 44 4444) are equal active members in ROCK the Ages 11.C. ROCK serves as agent and manager for prominent musicians in the Los Angeles area. 1he LLC's Fede

> On November 1, 2008, Janet Morton and Kim Wong formed Pet Kingdom, Inc., to sell pets and pet supplies. Pertinent information regarding Pet Kingdom i5 summarized as follows. • Pet Kingdom's business address is 1010 Northwest Parkway, Da

> Paul and Donna Decker are married taxpayers, ages 44 and 42, respectively, who file a joint return for 2018. The Deckers live at 1121 College Avenue, Carmel, IN 46032. Paul is an assistant manager at Carmel Motor Inn, and Donna is a teacher at Carmel Ele

> John Parsons (123-45-6781) and George Smith (123-45-6782) are 70%, and 30%, owners, respectively, of Premium, Inc. (11-1111111), a candy company located at 1005 16th Street, Cut and Shoot, TX 77303. Premium's S election was made on January 15, 2010, its

> Bob and Nancy are married and file a joint return. They are both under age 50 and employed, with wages of $50,000 each. Their total AGI is $110,000. Neither of them is an active participant in a qualified plan. What is the maximun1 traditional IRA deduct

> Linda is an employee of JRH Corporation. Which of the following is included in Linda's gross income? a. Premiums paid by JRH Corporation for a group term life insurance policy for $50,000 of coverage for Linda. b. $l ,000 of tuition paid by JRH Corporat

> Kim was seriously injured at her job. As a result of her injury, she received the following payments. • $5,000 reimbursement from employer-provided health insurance for medical expenses paid by Kim. The premiums this year paid by Kim's employer totaled $