Memo To: John & Jane Smith From: Date: 12/2/2014 Re: Summary of various tax issues Your first question is how is the $300,000 treated for purposes of federal tax income? In Code 61(a), income derived from services is one of the listed forms of taxable income. This includes fees, commissions, fringe benefits and similar items. Since the compensation was earned this year, even though you worked on the case for two years, you will include it as ordinary income this year. You can reduce your tax liability by deducting necessary business expenses that were paid in the same
Section 151(c) provides for a personal exemption for each individual who is a dependent, as defined in section 152(a), of the taxpayer for the taxable year. A “dependent” means a qualifying child or a qualifying relative. 1. A “qualifying child” means an individual who, among other requirements, bears a relationship to the taxpayer that is enumerated in section 152(c)(2); namely, the individual is a child of the taxpayer or descendant of such a child; or a brother, sister, stepbrother, or stepsister of the taxpayer or a descendant thereof.
When taxes are considered, the effective costs are affected by interest paid and the amortization of points on the loan. This analysis will require you to compare only before-tax costs. Bloomberg.com provides a mortgage calculator that allows you to compare the effective costs on alternative mortgages. You are considering three alternatives for a $250,000 mortgage. Assume that the mortgage will start in December, 2002.
Always c. When the business includes any real estate d. When more then half the value is real estate 9- An apartment information vendor is licensed by: a. Department of Law b. New York Attorney General’s office c. Department of State d. Division of Housing and Community Rental 10-When a license is revoked, how long must a licensee wait before applying to have the license reinstated? a. 18 months b.
This includes the risk, time, interest, and recapturing depreciation of the property. The appraiser must first calculate the possible income from the real estate property, what kind of vacancies that may occur, costs for operating the property, to result to potential net income. Once the possible net income is computed the appraiser must chose a capitalization rate to create a reasonable market value. For residential property, this approach is usually not generally used because once the property is sold there is no profit or benefit to be gained by the owner. For income property, the process is similar to the sales comparison approach using the gross rent multiplier or the cash flow analysis for capitalization.
Week 5 Assignment By: Felicia Bailey Course: ACC401 Federal Income Taxes 1 Date: October 2, 2014 Professor: Brent Tabor Week 5 Assignment Chapter 14 Questions: 48. A partner contributes property to a partnership in order to enter into the partnership. The outside basis carries over property to the partnership. Which this concept is also known as basis –in, basis –out. So, Denise’s beginning basis should be: Basis Cash $ 20,000 Office equipment $ 5,000 Auto $ 6,000 Partnership Basis $ 31,000 49.
Jane Smith Tax issues: A – If you were to sell you current home your gain on the sales or exchange of your principal home would be excluded to a maximum of $500,000. I would advise you to sell the old house and use the money to purchase a new house. There are no benefits to fully paying of your mortgage; you will still be able to deduct your property tax and your interest payments with the new house. Selling your old house with a realized gain of less than $500,000 you will be able to exclude your gain and not pay
See the “Wages, Salaries, Tips, etc.” line instructions for Form 1040. Note. If a year follows code D through H, S, Y, AA, BB, or EE, you made a make-up pension contribution for a prior year(s) when you were in military service. To figure whether you made excess deferrals, consider these amounts for the year shown, not the current year. If no year is shown, the contributions are for the current year.
Commissioner of Internal Revenue v. Court Holding Co., 33 AFTR 593 (65 S. Ct. 707), Code Sec(s), (S Ct), 03/12/1945 This is a case on the doctrine of “Substance over Form” in which a privately held corporation tries to distribute an asset as a liquidation dividend in order to nullify the tax effects of a sale of the asset by the corporation. This case involves a corporation of which there are two shareholders, Minnie Miller and her husband, Louis Miller. The corporation had 50 shares of common stock outstanding of which Minnie owned 48 and Louis owned the other 2. They formed this corporation for the sole intent of purchasing an apartment building and its contents. The apartment building was bought and subsequently leased to Aaron and Regina Feiwish for a three year term at an agreed upon rental of $8,500 a year payable in installments commencing on October 1, 1938.
What You Need to Know • What is included in the 2012 and 2013 Federal Tax Credit? • How do I apply for my Federal Tax Credit? What is included in the 2012 and 2013 Federal Tax Credit? The following applies to the 6 product categories below: Tax Credit: 10% of cost up to $500 or a specific amount from $50–$300 Expires: December 31, 2013 Details: Must be an existing home & your principal residence. New construction and rentals do not qualify.