If she were to move to another state where her marginal state rate would be 10 percent, would her choice be any different? Assume that Dana itemizes deductions. When the state rate is 5 percent, Dana would achieve the following returns from the Treasury bond or the corporate bond: The Treasury bond yields $1,125 or $30,000 x [.05 x (1-.25)] after tax. The corporate bond yields $1,282.50 or $30,000 x [.06 x (1 - .25 - .05(1-.25))] after tax. Note that the actual state rate is reduced by 25% to allow for the deductibility of state income taxes on the federal income tax return.
[3] http://www.irs.gov/businesses/small/article/0,,id=146335,00.html It is important to determine if the taxpayer martially participates because this classifies the income as active or passive. Passive activity losses are non-deductable from active and portfolio income. This is why it is important to determine if the taxpayer martially participates in the business activity. PROBLEMS: 7-46) The $30,000 loss is considered a passive loss and can only be deducted against passive income, it is therefore suspended and carried forward to future years to offset potential passive income in those years. Mary has no martially participation in the rental activity, therefore the loss is considered
Question 14-4 - What is the purpose of Code Sec. 351 in regard to transfer to corporation? Code Sec. 351 states that no gain or loss is recognized by shareholders if property is transferred to a controlled corporation by one or more persons in exchange for stock in the corporation. Moreover, no gain or loss is recognized to a corporation upon the receipt of money or other property in exchange for the stock of such corporation.
1(b) The next question is how should the $25,000 you received as reimbursement for expenses paid for up front be treated in terms of income taxes. As you stated, the $25,000 was received as reimbursement for expenses that you paid up front. The first thing we would need to consider is whether or not you deducted the expenses within the tax returns for prior years. If the expenses were deducted as business activities in prior years, then the $25,000 would be taxable. However, if the expenses incurred while working on this case were not deducted previously, then they would be non-taxable.
| Math 103 Final Project – Parts 1, 2, and 3 | | | Math 103 Instructor: Toni Robertson December 11, 2010 Math 103 Instructor: Toni Robertson December 11, 2010 Part 1: 1a. What is the shortest loan (36 months, 48 months, 60 months or 72 months) that has a monthly payment within your $500 budget that will allow you to buy the $15,000 car? Answer: Through Bank of America, I found a rate of 2.99% for the 36, 48 and 60 month loans. We are able to put down 20% and will need to finance $12,000. The shortest loan period for the $15,000 car that would be under our $500 limit is the 36 month loan at a rate of $348.93 per month.
The car had originally cost $40,000. At the time of the accident, the car was worth $20,000 and Alicia had taken $8,000 of depreciation. The car was totally destroyed and Alicia had let her car insurance expire. If Alicia’s AGI is $50,000 (before considering the loss), determine her itemized deduction for the casualty loss. a.|$2,100.| b.|$5,900.| c.|$6,100.| d.|$16,900.| e.|None of the above.| ANS: C |Business Use|Personal Use| Cost|$20,000 |$20,000 | Less: depreciation| (8,000)| -0- | Basis|$12,000 |$20,000 | Fair market value|$10,000 |$10,000 | Loss|$12,000 |$10,000 | AGI||$50,000 | Less: Business loss|| (12,000)| Modified AGI||$38,000
For the regular tax, Ash has in the same year, the tax treatment adjustment related to (3) above. Then, a long-term capital gain of $50,000 under the regular tax and the AMT is refigure Form 4684, Form 4797, and ($60,000 minus his regular tax basis of the same, and no adjustment is Schedule D for the AMT, if applicable, $10,000). For the AMT, Ash has a required. by taking into account any adjustments long-term capital loss of $40,000 Increase your AMT basis in any you made this year or in previous years ($60,000 minus his AMT basis of stock acquired through the exercise of that affect your basis or otherwise result $100,000). an ISO by the amount of the in a different amount for the AMT.
14-18, Code Sec.1032 states that a corporation does not recognize a gain or loss on the receipt of money or other property in exchange for its stock. Also, it does not recognize income when it receives money or other property as a contribution to capital (i.e., the corporation does not issue stock, debt, money, or property in return for the contributed property). It also states any amounts received from voluntary pro rata payments from shareholders are not income to the corporation even though no stock is
c. After purchasing a personal residence, Paul probably will no longer claim the standard deduction on the income tax return. Due to mortgage interest and property tax deductions he will itemize his deductions on Schedule A. 5. For wage earners, the tax system requires employers to withhold for taxes a specified portion of an employee’s wages. Persons with income form other than wages have to make quarterly payments to the IRS for estimated taxes due for the year.
Earned income includes all the taxable income and wages one gets from working. According to the Internal Revenue Services (IRS), “taxable income includes wages, salaries, tips, union strike benefits, long-term disability benefits received prior to minimum retirement age, and net earnings from self-employment.” “A taxpayer's income can come from a number of sources other than regular employment, and can include exchanges of property or even bartering. Unless a type of income is specifically exempted from taxation by law, it will be considered taxable income” cited in IRS Publication 525. I am going to first talk about the individuals that are getting ready to prepare their tax return for the year ending 2009. I have a married couple who is looking to file a joint return.