b) Which of the above items are classified as For AGI and From AGI deductions? c) How would your answers to parts (a) and (b) change if Brandy were an employee rather than self-employed and none of the above expenditures were reimbursed by her employer? 7) On February 20, 2015, Charles, who is single and age 32, establishes a traditional deductible IRA and contributes $5,500 to the account. Charles’ AGI is $66,000 in 2014 and $57,000 in 2015. Charles is an active participant in his employer’s retirement plan.
Question 5. (TCOs 3, 4, 5, & 7) During the past two years, through extensive advertising and improved customer relations, Beech Corporation estimated that it had developed customer goodwill worth $100,000. For the current year, determine the amount of goodwill Beech Corporation may amortize. Question 6. (TCOs 3, 4, 5, & 7) Damien, not a dealer in real estate, sold real estate with a basis of $250,000 for $500,000 cash, a note for $250,000, and the buyer assumed Damien’s mortgage on the property of $125,000.
Their current FMV at the date of the theft was $12,000. The antiques were not insured. Neil’s AGI for the current year is $60,000. What is the amount of Neil’s deductible casualty loss in the current year? 4) In 2013, Sarah loans Seymour $5,000 for his use in establishing his business.
(5) So the distinction between hobby and business is important to determine the taxability of the profits earned from such activity. The nature of activity shows that it is a business. By classifying it as a business, you will be able to deduct the associated expenses on Schedule C. The IRS will make use of the “3 of 5” rule to determine if it is a hobby or a business i.e. if the business has made profits in three out of past five consecutive years. 2(d) Yes, it would be better as you can claim first year expense deduction for equipment purchased, claim expenses and deduct your business losses.
In 2013 the couple sold their house for $500,000 and bought a new house for $700,000 in cash. When they sold their house they paid 6% to the real estate agent which in total was $30,000 in fees. They file jointly and had joint ownership of the sold property. Research Issue Is the sale of the home in 2013 made by Mr. Junkiewicz and his wife a taxable transaction? Law and Analysis The taxpayer relief act of 1997 exempted from taxation the profits on the sale of a personal residence of up to $500,000 for married couples filing jointly and $250,000 for singles.
In 2011, he made six payments. How do the transactions in the divorce agreement affect Arnold's and Barbara's taxable income? Answer: Transfer of property to spouse pursuant to divorce is not taxable. Arnold will get a deduction of $1500 per month for 6 months as an adjustment on his tax return toward Alimony. Barbara will include the same amount as income on her tax return.
ch14 Student: ___________________________________________________________________________ 1. In general terms, the tax laws favor taxpayers who own their principal residence relative to taxpayers who rent it. True False Renting a residence may have nontax advantages over owning a home. True False A personal residence is not a capital asset. True False A taxpayer may be required to pay tax on a gain the taxpayer realizes when she sells her principal residence.
The providers (savers) are households and the U.S. government when it runs a surplus. The users (borrowers) are non-financial corporations and governments. j. What do we call the price that a borrower must pay for debt capital? What is the price of equity capital?
The Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (“SAFE Act”), was passed on July 30, 2008. The new federal law gave states one year to pass legislation requiring the licensure of mortgage loan originators according to national standards and the participation of state agencies on the Nationwide Mortgage Licensing System and Registry (NMLS). The SAFE Act is designed to enhance consumer protection and reduce fraud through the setting of minimum standards for the licensing and registration of state-licensed mortgage loan. Mortgage loan originators who work for an insured depository or its owned or controlled subsidiary that is regulated by a federal banking agency, or for an institution regulated by the Farm Credit Administration,
Schedule M is used to determine whether you received the full benefit in your paycheck or if there is money due to you. The making work pay credit helps millions of workers and self-employed individuals, while the government retiree credit especially targets former government workers who are not receiving Social Security benefits. Income limits apply to the making work pay credit but not to the government retiree credit. Both credits are refundable, meaning that those eligible can get them even if they owe no tax. According to the IRS, “for most workers, the credit is based on the taxable wages reported to them on Forms W-2.