6. Explain what is a tax credit and tax deduction. While tax deductions work by lowering taxable income, tax credits are a direct reduction of the tax due. After you figure out your taxable income and subtract your deductions, you calculate your tax due. You still have a chance to reduce that amount, often significantly, by taking advantage of any allowable tax credits.
This is consistent with FASB codification ASC250-10-45-23 2. What effect, if any, does eVade’s decision to participate in the tax amnesty program have on the amount recognized as of March 31, 2012? According to ASC250-10-50-9 the participation in the tax amnesty program will cause a liability to be recorded in the current year statements and adjustments for prior periods. If comparative financial statements are issued, the prior year column will need to reflect the adjustment and a change in opening balance (retained earnings) for the current year. 3.
When a net operating loss is carried back to a non-loss year, the net operating loss is a miscellaneous itemized deduction. ANS: F An NOL is a business loss. Therefore, the deduction is a deduction for AGI. PTS: 1 REF: p. 7-23 MULTIPLE CHOICE 1. Mable is in the business of factoring accounts receivable.
If subsequently resold for a sum larger than the cost, Alcoa should report for the sale of the treasury stock by debiting cash for the sale cost, crediting treasury stock for cost, and crediting additional paid-in capital from repurchased stock for the excess of the selling price over the cost. Adversely, if the stock is retired, Alcoa
Alternatives: A. Recognize compensation expense at each year end and disclose swap transactions in the notes to the financial statements: Record the following entry at year end Dr. Compensation Expense XXX Cr. Paid-in Capital-Stock Options XXX This will reduce pre tax income and increase total paid-in capital B. Disclosure in notes to financial statements only IV.
What are the firm’s income tax liability and its after-tax income? What are the company’s marginal and average tax rates on taxable
only the portion of the loss attributable to inventory sold during the period is recorded in the financial statements. B. the market value figure for ending inventory is substituted for cost and the loss is buried in cost of goods sold C. a loss is recorded directly in the inventory account by crediting inventory and debiting loss on inventory decline. D. there is a direct reduction in the selling price of the product that results in a loss being recorded on the income statement prior to the sale. 15) Designated market value A. may sometimes exceed net realizable value. B. should always be equal to net realizable value less a normal profit margin.
His AMT basis restriction) when your rights in the tax. This is because the property may in the stock at the end of 2009 is acquired stock first become have a different adjusted basis for the $200,000. transferable or when these rights are AMT. Use this line to report any AMT
Employers can choose from a variety of investments such as company stocks, diversity stock market funds, or federal government bond funds. Companies can take a take deduction for their contributions such as in profit sharing plans. Section 401(k) plans has employer tax benefits where employers deduct their contributions to the plan from a taxable
H&R Block This case is a federal class action suit against H&R Block. H&R Block offers refund anticipation loans (RALS) a RAL is a short term loan that is funded either the day the client does their federal tax return or the next day this loan is given out at a substantial interest rate for someone that is entitled to a refund on their federal tax return. Block also offers refund anticipation checks (RACS) as part of their tax services. The RAC is when you don’t have the money to pay for your tax services. H&R Block will charge a convenience fee to take the tax preparation fee out of the person’s tax refund.