How is the $25,000 treated for purposes of federal tax income? c. What is your determination regarding reducing the taxable amount of income for both (a) and (b) above? d. Is it more beneficial to continue leasing the business space or to buy the building? 2. Jane Smith tax issues: e. What are the different tax consequences between paying down the mortgage (debt) and assuming a new mortgage (debt) for federal income tax purposes?
Assume that the mortgage will start in December, 2002. The mortgage company is offering you a 6% rate on a 30-year mortgage with no points. If you pay 1.25 points, they are willing to offer you the mortgage at 5.875%. If you pay 2 points, they are willing to offer you the mortgage at 5.75%. a.
Comparing Roth IRA’s to Roth 401 (k)’s A Roth IRA account is an individual’s personal retirement account that allows them to set aside after tax income up to a specified amount per year. The earning on the account as well as the withdrawals after age 59 ½ are tax free. The Roth 401 (k) combines the features of a traditional 401 (k) with features of a Roth IRA. Both of these retirement plans allows for the individual to contribute to the account without any up front tax deductions. As long as the account was held for more than five years withdraws are not subject to income tax after the normal retirement age.
A payee whose name is misspelled on an instrument cannot indorse the instrument. (404) _F_ 17. An instrument payable to two persons jointly requires the endorsement of both of the payees for negotiation. (404) _F_ 18. A person who receives an instrument as a gift does not possess the rights
She also has the possibility of taking an unsecured loan from her own bank of £3000 where the variable APR charged is currently 12 per cent. Panna has also just received a letter from a different bank to apply for a credit card on which the variable interest rate on new purchases for the first four months would be 0 per cent p.a. and would then rise to the normal variable rate (currently the normal rate is 18 per cent p.a.). • Panna could use all her savings to fund the purchase of the furniture outright. State one advantage and one disadvantage of this course of action.
Code Sec. 61(a)(1) of the Internal Revenue Code (“IRC”) states that the general definition of gross income is “all income from whatever source derived, including (but not limited to) the following items: compensation for services, including fees, commissions, fringe benefits, and similar items.” IRC section 451(a) states “the amount of any item of gross income shall be included for the taxable year in which received by the taxpayer, unless under the method of accounting use in computing taxable income, such amount is to be properly accounted for as of a different period. Since the $300,000 received a fee in the form of compensation, it is gross income as defined under Code Sec. 61(a)(1) and John must include the $300,000 fee with his gross income for the current year while preparing his income taxes per Code Sec. 451(a).
0 the expense is actually incurred. 0 None of the above (TCO A) Which of the following does not constitute tax evasion? 0 Arranging your affairs to keep your tax liability as low as possible under the tax law 0 Trying to legitimately maximize profits 0 Trying to legitimately minimize your tax liability . ; @ All of the above (TCO C) Which of the following items is not subject to federal income tax? 0 Interest on U.S. Treasury bonds 0 Gambling winnings 0 Interest on loans made in the ordinary course of business .
1. Billy Dent, as the owner of an apartment building, receives and makes the following payments during 2012: Received in January 2012 rent that was $5,000 due in December 2011 Received in December 2012 rent not 4,000 due until January 2013 Security deposit which is to be 500 refunded when tenant vacates the apartment How much rental income must Billy Dent include on his 2012 income tax return? 2. Arnold and Barbara Cane were divorced in June 2012. Pursuant to the divorce decree, Arnold is obliged to perform as follows: a.
The parties have no minor children. As a result, the remaining issues before the Court are property and debt. Community Property Community Home- Since the date of separation, the Petitioner has remained out of the community home. The Petitioner has rented a place for himself. Petitioner has paid the mortgage since the date of separation by agreement.