2.99 See Answer

Question: Sarah is vice president of production for


Sarah is vice president of production for Fenner Inc., a corporation, which maintains a money purchase pension plan for its employees. She owns 8% of Fenner’s stock. Determine the maximum deductible contribution the company can make to the pension plan in each of the following situations:
a. Sarah’s salary is $95,000.
b. Sarah’s salary is $320,000.


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> Juan and Angel, ages 56 and 54, respectively, decide to establish Roth IRAs. Juan and Angel are married, and both are covered by pension plans where they work. Their adjusted gross income is $125,000. They want to make the maximum contribution to the

> Bostian Company reports a net Section 1231 gain of $31,000 during the current year. Identify the tax issue(s) posed by the facts presented. Determine the possible tax consequences of each issue that you identify.

> Glenna is retired from the Cherry Hills Corporation. When she retired at 68, she decided to take her pension as a lump-sum distribution and roll over the proceeds tax free into her IRA. On January 1, 2015, she began to receive the required $22,000 dist

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> Smile Corporation invests $2.0 million for a 49% interest in Irehoe Inc., a newly formed Irish corporation that manufactures farm equipment. Jim, a U. S. resident, owns 10% of Irehoe. Jim owns no stock in Smile Corporation. An Irish corporation owns t

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> John is single and has $74,000 income from his job at Lawndale Ice Cream Company. He wants to invest $150 a month in an IRA but is not sure which type he qualifies for and whether this would be a better investment than putting the money in a money marke

> The United States and the country of Bersia are about to enter into a tax treaty. The U. S. is especially interested in establishing a treaty because many U. S. students attend medical school in Bersia and work while getting their medical degrees. In

> Genco Company is a small manufacturing company that makes metal presses for larger manufacturing companies. Genco is located in a large city and desires to expand its operations, which will require it to hire more workers. Some of the workers need to b

> The Alternative Minimum Tax remains a very controversial item that affects a greater number of taxpayers each year. Go to http://en.wikipedia.org/wiki/Alternative_Minimum_Tax and read through the wiki that discusses the Alternative Minimum Tax (AMT) and

> Use the Internet to find articles or discussions about planning aspects of Roth IRAs and regular IRAs. Trace the steps you use to find additional information (search engine or tax directory used and key words). Write a summary of the information you fi

> Assume the same facts as in problem 98, except that Jingling’s royalty income is from investments located in Japan. Data from Problem 98: Jingling Corporation is wholly owned by Jing and Ling, who are residents of Japan. Jingling is located in Nebraska

> Jingling Corporation is wholly owned by Jing and Ling, who are residents of Japan. Jingling is located in Nebraska and produces home furniture. Jingling sells its furniture directly to final customers in the U. S. and Japan. Jingling earns $250,000 fr

> Nina is the auditor for Geiger Construction, a local builder. Geiger recently renovated a historic building in downtown Kingston. The building, which consists of 5 shops, is owned by the Restoring Historic Kingston Partnership (RHKP). Nina is also the

> While snorkeling on spring break in Cancun, Melody finds a small bag containing several jewels lodged between some rocks about 25 yards offshore. She reports the find to the local authorities. However, no one has reported a loss of jewels, and Melody i

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> Why are tax credits rather than a deduction used to provide tax relief?

> What is the tax treatment of a stock option that qualifies as an incentive stock option? What is the treatment if the requirements are not met?

> What requirements must a stock option meet to qualify as an incentive stock option?

> What is the advantage of making a Section 83(b) election?

> How is a nonqualified stock option taxed if it is subject to substantial risk of forfeiture?

> Explain the difference in the tax treatment of a nonqualified stock option that has a readily ascertainable fair market value and one that does not have a readily ascertainable fair market value.

> Explain the differences between a nonqualified stock option plan and an incentive stock option plan.

> Jackie receives 100 shares of stock as a birthday gift from her Uncle Horace. Horace acquired the shares 22 years ago for $4 each. The stock's value on Jackie's birthday is $36 per share. She sells half her shares for $1,500 five months after her birt

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> Discuss the penalty provisions associated with qualified pension plans, Keoghs, and IRAs.

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> How is the required minimum distribution (RMD) from a pension plan determined?

> Compare the different funding options available to an employer under a SIMPLE-IRA plan and a SIMPLE-401(k) plan. Discuss how these funding options affect the amount the employee and employer can contribute to the plan.

> What requirements must a taxpayer meet to establish a simplified employee pension plan?

> How does a simplified employee pension plan differ from a Keogh plan? From a qualified pension plan?

> Are all taxpayers (including spouses of active participants) allowed a deduction for a contribution to an individual retirement account? Explain.

> How does being an owner-partner affect the amount that can be contributed to a Keogh plan?

2.99

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