30% Withholding Tax Nonresident individuals earning rental income and other fixed and determinable annual or periodic income which are not effectively connected with trade or business are taxed at a flat rate of 30%, withheld by the tenant. Electing Business Income Option Nonresident individuals earning rental income can elect to consider this income as effectively connected with trade or business. Through this option, the taxpayer will be taxed on his net income at progressive rates. CAPITAL GAINS TAX Capital gains incurred for the transfer of property in Guam is taxed as in the US. The taxable gain is computed by deducting the acquisition costs (adjusted for inflation) and transfer costs from the selling price.
b. How is the $25,000 treated for purposes of federal tax income? The $25,000 will have to be treated as an expense. c. What is your determination regarding reducing the taxable amount of income for both (a) and (b) above? I have determined that you have to account for all qualified business expenses and only net income will be taxable.
The excess of nonbusiness capital losses over nonbusiness capital gains must be added to taxable income to compute the net operating loss of an individual. ANS: T PTS: 1 REF: p. 7-21 49. An individual taxpayer who does not itemize deductions uses the standard deduction to compute the excess of nonbusiness deductions over the sum of nonbusiness income and net nonbusiness capital gains for purposes of computing net operating loss. ANS: T PTS: 1 REF: p. 7-22 50. When a net operating loss is carried back to a non-loss year, the net operating loss is a miscellaneous itemized deduction.
The first safe harbor rule states that as long as the taxpayers quarterly payments equals 90% of what is due on the tax return they can escape a penalty. The second safe harbor allows the taxpayer to avoid a penalty as long as they pay 100% of the amount from the previous year’s tax return. If the taxpayer’s AGI exceeds $150,000, they must pay 110% of the previous year’s return. Chapter 3 (5 pts) Above-the-line, or For AGI deductions, are taken out before your AGI is calculated. Above- the-line deductions include alimony, student loan interest, and moving expenses.
BRIEF EXERCISE 19-8 Income before income taxes $195,000 Income tax expense Current $48,000 Deferred 30,000 78,000 Net income $117,000 BRIEF EXERCISE 19-10 Year | Future taxable amount | X | Tax Rate | = | Deferred tax liability | 2013 | $ 42,000 | 34% | $ 14,280 | 2014 | 244,000 | 34% | 82,960 | 2015 | 294,000 | 40% | 117,600 | | | | $214,840 | BRIEF EXERCISE 19-14 Income Tax Refund Receivable ($350,000 X. 40) 140,000 Benefit Due to Loss Carryback 140,000 Deferred Tax Asset ($500,000 – $350,000) X .40 60,000 Benefit Due to Loss Carryforward 60,000 Benefit Due to Loss Carryforward 60,000 Allowance to Reduce Deferred
Chapter 8: Date placed in service (see concept summary 8.1 in the text). The applicable system of depreciation or cost recovery is dependent on the date the property is placed in service. The small business jobs act of 2010 extended 50% additional first-year depreciation for qualified property acquired and placed in service before january 1, 2011. The tax relief act of 2010 extended additional first-year depreciation for qualified property acquired and placed in service before january 1, 2013. The percentage is 100% for property placed in service after september 8, 2010 and before january 1, 2012.
Accrued Vacation Pay- Current Liability B. Estimated Tax Payable- Current Liability C. Service warranties on appliance sales- Currently Liabilities D. Bank overdraft- Current Liability E. Personal injury claim pending- Footnote Disclosure. F. Unpaid bonus to officers- Current Liability G. Deposit received from customer to guarantee- Current Liability H. Sales tax payable- Current Liability I. Gift certificates sold to customers but not yet rendered- Current Liability. J.
Good Citizen, Inc. incurred their first loss during this fiscal year on both their financial statements and tax returns. Suppose there are no differences between the calculation of book income and taxable income. The net loss this year was $1,000,000, prior year's income was $12,000,000 and the applicable tax rate was 40%. What would the entry be if the government(s) allowed the Company to carry a tax loss back to prior tax years for a full refund of prior taxes paid? a. DR Deferred tax asset $400K, CR Tax benefit (provision) $400K b. DR Current tax receivable $400K, CR Tax benefit (provision) $400K c. DR Tax expense (provision) $400K, CR Current taxes payable $400K d. DR Tax expense (provision) $400K, CR Deferred tax liability $400K e. DR Current tax expense $400K, CR Deferred tax expense $400K 4.
Dividends and dividend equivalent rights declared | | | 0 | | | | 0 | | | | (10,676 | ) | | | 0 | | | | (10,676 | ) | Repurchase of common stock | | | (46,976 | ) | | | 0 | | | | (22,950 | ) | | | 0 | | | | (22,950 | ) | Share-based compensation | | | 0 | | | | 2,253 | | | | 0 | | | | 0 | | | | 2,253 | | Common stock issued under stock plans, net of shares withheld for employee taxes | | | 6,981 | | | | (143 | ) | | | (444 | ) | | | 0 | | | | (587 | ) | Tax benefit from equity awards, including transfer pricing adjustments | | | 0 | | | | 1,232 | | | | 0 | | | | 0 | | | | 1,232 | | | | | | | | | | | | | | | | | | | | | | | Balances as of September 28, 2013 | | | 899,213 | | | $ | 19,764 | | | $ | 104,256 | | | $ | (471 | ) | | $ | 123,549 | | | | | | | | | | | | | | | | | | | | | |
Question 2 of 100 (2B5-LS53) Flag for Review A manufacturer with seasonal sales would be most likely to obtain which one of the following types of loans from a commercial bank to finance the need for a fixed amount of additional capital during the busy season? *Source: Retired ICMA CMA Exam Questions Insurance company term loan. Transaction loan. Unsecured short-term term loan. Installment loan.