Acct 553- Week 1 Hw

In: Business and Management

Submitted By taxation3
Words 403
Pages 2
ACCT553
Week 1 Homework
_______________________________________________________
Please provide your answer to each question in the space provided below.
When finished, submit to the DropBox.

Chapter 1 (5 pts) 1. Briefly discuss the purpose of the Sixteenth Amendment.

The 16th amendment states that congress has the power to indirectly or directly tax income from any source derived. The purpose of the sixteenth amendment is to allow the government to create income taxes. The 16th amendment was adopted in 1903, when three-fourths of the states ratified the agreements. If these taxes are not paid, the government has the night to take income or land as payment.

Chapter 2 (5 pts) 2. Explain the two "safe harbors" available to an Individual taxpayer to avoid a penalty for underpayment of estimated tax.

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) 3. Explain the distinction between an "above the line" deduction (i.e. FOR AGI) and a below the line deduction (i.e. FROM AGI). Which one is more valuable?

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. Below-the-line deductions include medical expenses and interest expenses, and are taken out after the finalization of your AGI. For AGI deductions are more valuable to the taxpayer because it reduces the AGI.
Chapter 13 (5 pts)
4. What is an Installment Sale? Is it a form of income "deferral"? When can't you elect this form of reporting?
An…...

Similar Documents

Acct 553, Week 4 Hw

...Introduction to Federal Taxation Week 4 Assignment November 24 2012 4. What is the purpose of Code Sec. 351 in regard to transfers to corporations? The purpose of Code Sec. 351 is to allow shareholders of a corporation to defer recognition of a gain or loss on the transfer of assets to a corporation. The transfer of property can be made when a new corporation is formed, or when additional capital is put into existing corporations. Without Code Sec. 351, sole proprietors and partnerships would have a difficult time adopting the corporate form of organization for legal and tax purposes because the transfer of appreciated property would create a taxable transaction. The deferral of gain or loss under this section is justified because the assets have simply been transferred to a corporation that is controlled by the transferors. Section 351 also prevents the recognition of losses on transfers of property that has declined in value. 20. What tax years are available to corporations? How do the options differ from other forms of business organizations? Upon establishing a new corporation, the corporation may choose either a calendar year or a fiscal year. They may choose either of the two regardless of the tax years of its owners which creates tax savings. This differs from other forms of business organization as the S corporation, the Partnership, and Limited Liability Companies are all required to use the calendar year unless they can establish a business purpose to...

Words: 674 - Pages: 3

Acct 553 Wk 4 Hw

...ACC553 Week 4 Homework 4. What is the purpose of Code Sec. 351 in regard to transfers to corporations? To avoid the deterrent when there is no change in wherewithal to pay, because the government does not want to discourage corporate formation. Under this code there is no gain or loss recognized upon transfer as long as the transferor is in control of the corporation immediately afterwards. 20. What tax years are available to corporations? How do the options differ from other forms of business organizations? Upon establishing a new corporation, the corporation may choose either a calendar year or a fiscal year. They may choose either of the two regardless of the tax years of its owners which creates tax savings. This differs from other forms of business organizations, S corporations are required to use the calendar year unless they can establish a business purpose to use a fiscal year. Partnerships has to have the same tax year as their partners who have a majority interest unless there isn’t one then they use the same year of all its principle partners, unless none exists then the least aggregate deferral method must be used unless the partnership can establish a business purpose to use the fiscal year. 22. What are the differences in the treatment of capital gains and capital losses of corporations and of individuals? Corporations cannot take deductions for net capital losses in the year in which they occur and can never use net capital losses to reduce......

Words: 600 - Pages: 3

Acct 553 Week 1

...Homework Questions Week 1 3/31- Tom and Linda are married taxpayers who file a joint return. They have itemized deductions of $12,250 and four exemptions. Assuming an adjusted gross income of $40,000, what is their taxable income for 2012? 40,000-12,250=27,750 27,750-4(3700)=20,350 AGI 40,000 Itemized income(less) 12,250 Itemized income Personal (less) 4*3700(14800) Taxable income 12,950 3/32-Compute Marie's taxable income for 2012, assuming she is single and claims two dependent children. Her adjusted gross income is $70,000, and she has itemized deductions of $9,000. 70,000-9,000=61,000 61,000-3(3,700)= 49,900 AGI 70,000 Itemized deductions (less) 3(3700)=11,100 Personal itemized deductions 9,000 Taxable Income 49,900 3/36-Compute Stanley's taxable income for 2012, assuming he has $1,000 in wages from working in a grocery store and $2,000 in interest income from some bonds he owns. Stanley, age 16, is claimed as a dependent on his parents' return. 3,000-1,300= 1,700 AGI 3,000 Deductions ( +300) 1,300 Taxable Income 1,700 13/55-Mr. Z, a nondealer, sold assets on an installment plan. Determine Mr. Z's gross income for2012. Relevant data include: Gross......

Words: 453 - Pages: 2

Acct 553 Week 3 Hw

...ACCT553 Week 3 Homework ¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬_________________________________________________________ Please provide your answer to each question in the space provided below. When finished, submit to the DropBox. Chapter 7 1. In your "own" words, please describe what a "Suspended Loss" is, how it is generated and when it is becomes deductible. (5 pts) Suspended losses are generated as a result of passive activities, and can only be carried forward and treated as a deductible in the next year or future year(s)). Code Sec. 469 (b). As stated in our book and in lecture on January 23, 2014, as a rule, any loss or credit from a passive activity is not allowed by the passive loss rules in a given tax year so, therefore it is "suspended" to the next taxable year or until they can be netted against passive income in a future tax year. “Sec. 469. Passive activity losses and credits limited (a) Disallowance (1) In general If for any taxable year the taxpayer is described in paragraph (2), neither - (A) the passive activity loss, nor (B) the passive activity credit, for the taxable year shall be allowed. (2) Persons described The following are described in this paragraph: (A) any individual, estate, or trust, (B) any closely held C corporation, and (C) any personal service corporation. (b) Disallowed loss or credit carried to next year Except as otherwise......

Words: 1260 - Pages: 6

Acct 553 Week 1 Homework

...ACCT553 Week 1 Homework _________________________________________________________ Please provide your answer to each question in the space provided below. When finished, submit to the DropBox. Chapter 1 (5 pts) 1. Briefly discuss the purpose of the Sixteenth Amendment. The sixteenth amendment, which was passed by Congress in 1909, grants the power to collect federal income taxes (Smith et al. 2015). Congress is given the authority to collect tax on any source of income, whether directly or indirectly. All individuals, and businesses, are required to pay federal taxes. Prior to the sixteenth amendment, Congress was only able to levy tariffs on imported goods. Congress tried to tax individuals on their property for additional revenue, but this tax was considered unconstitutional in the Pollock Case (Hart 2002). The reason for this being unconstitutional, was because it was deemed as an unapportioned tax, which was not allowed by the Constitution at the time. There was a large disparity between the rich and poor class, and income tax was intended to “level the plainfield”. The original purpose of the sixteenth amendment was to provide a tax relief to wage earners (Hart 2002). Now that all wages are taxed, whether apportioned or not, taxing the rich was supposed to assist the lower classes while generating revenue for the government. Hart, Phil. "Phil Hart -- Constitutional Income: The Purpose of the 16th Amendment. Part1."Phil Hart -- Constitutional Income: The......

Words: 872 - Pages: 4

Acct 444 Week 1 Hw

...Crystal McPherson Homework-Week 1 1-18: a. The services provided by Consumers Union are comparable to the assurance services provided by that of a CPA firm. Both the services of Consumers Union and that of a CPA firm are designed to improve the quality of information for decision makers related to their services. While CPA’s are valued for their independence, Consumers Union is valued for their reports due to their independence of the products tested. b. The concepts of information risk for the buyer of an automobile and for the user of financial statements is generally the same. Both parties are worried with unreliable information being provided. The buyer of an automobile would be concerned with misinformation or lack of information provided by the manufacturer or dealership. Where the user of a financial statement would be concerned with unreliable information that is provided in the financial statements. c. Remoteness of information: It can difficult for an automobile buyer to obtain necessary information about either an automobile without incurring considerable cost to them. The automobile buyer does have an advantage though of possibly knowing other users who are satisfied or dissatisfied with a similar automobile. Word of mouth. Biases and motives of provider: There is a conflict between the automobile buyer and the manufacturer. The buyer wants to buy a high quality product at minimum cost whereas the seller wants to maximize the selling price......

Words: 1245 - Pages: 5

Acct 553 Week 1 Homework Solution

...ACCT 553 Week 1 Homework Solution http://hwguiders.com/downloads/acct-553-week-1-homework-solution/ • 3-31. Tom and Linda are married taxpayers who file a joint return. They have itemized deductions of $12,250 and four exemptions. Assuming an adjusted gross income of $40,000, what is their taxable income for 2012? • 3-32. Compute Marie’s taxable income for 2012, assuming she is single and claims two dependent children. Her adjusted gross income is $70,000, and she has itemized deductions of $9,000. • 3-36. Compute Stanley’s taxable income for 2012, assuming he has $1,000 in wages from working in a grocery store and $2,000 in interest income from some bonds he owns. Stanley, age 16, is claimed as a dependent on his parents’ return. • 13-55. Mr. Z, a non-dealer, sold assets on an installment plan. Determine Mr. Z’s gross income for 2012. Relevant data include: • 13-69. Comprehensive Problem. Bill is a cash-basis, calendar-year taxpayer. Which of the following December items result in gross income or deductions for the current year? ACCT 553 Week 1 Homework Solution http://hwguiders.com/downloads/acct-553-week-1-homework-solution/ • 3-31. Tom and Linda are married taxpayers who file a joint return. They have itemized deductions of $12,250 and four exemptions. Assuming an adjusted gross income of $40,000, what is their taxable income for 2012? • 3-32. Compute Marie’s taxable income for 2012, assuming she is single and claims two dependent children. Her adjusted gross......

Words: 2897 - Pages: 12

Acct 553 Week 4 Homework

...ACCT 553 Week 4 Homework Purchase here http://chosecourses.com/ACCT%20553/acct-553-week-4-homework Product Description Page 1 Chapter 14 1. Please describe the concept of "double taxation" and discuss which entity(ies) are subject to this type of taxation. (5 pts) 2. What type of taxpayers are considered "eligible" taxpayers with regard to special ordinary loss treatment of IRC Section 1244 stock? (5 pts.) 3. Please describe how the treatment of capital gains(losses) differ for a C Corporation as compared to an Individual. ( 5 pts.) 4. Please describe the concept of "Depreciation recapture". ( 5 pts.) Page 2 4. What is the purpose of Code Sec. 351 in regard to transfers to corporations? 20. What tax years are available to corporations? How do the options differ from other forms of business organizations? 22. What are the differences in the treatment of capital gains and capital losses of corporations and of individuals? 55. Susan Sweets is a 40 percent shareholder in Acclaim Inc., a theatrical supplies company. She transfers a fully depreciated car with a value of $2,000 to the corporation, but does not receive any consideration for it. a. What are the tax consequences to Susan? b. What are the tax consequences to the corporation? c. What, if any, changes if Susan received another 10 percent stock interest for the car? 62. A corporation has income of $62,000 from operations and a net long-term capital loss of $5,000. What is the corporation's......

Words: 1290 - Pages: 6

Acct 553 Week 5 Homework

...ACCT 553 Week 5 Homework Purchase here http://chosecourses.com/ACCT%20553/acct-553-week-5-homework Product Description (Chapter 14) • 24. What is the purpose of the dividends received deduction? What corporations are entitled to claim this deduction? What dividends qualify for this deduction? • 51. What is the purpose of the reconciliation of taxable income with book income? • 52. Sam Rogers forms a corporation. Sam transfers to the corporation property having a basis to him of $15,000 and a fair market value of $27,000 for 900 shares of the $10 par stock of the corporation. A year later, Bill Morrison, who is not related to Sam, transfers property having a basis to him of $1,000 and a fair market value of $3,000 for 100 shares of the corporate stock. The corporation issued no other stock. (a) How much gain does Sam recognize on his exchange? What is the basis to Sam of his 900 shares? (b) How much gain does Bill recognize on his exchange? What is the basis to Bill of his 100 shares? (c) What gain or loss is recognized by the corporation when it issues its shares to Sam? What is the basis to the corporation of the property it received from Sam? (d) What is the gain or loss recognized by the corporation when it issues its shares to Bill? What is the basis to the corporation of the property it received from Bill? (Chapter 17) 1. Identify and briefly describe the seven types of corporate reorganization. ACCT 553 Week 5 Homework Purchase......

Words: 1281 - Pages: 6

Acct 553 Week 4 Homework

...ACCT 553 WEEK 4 HOMEWORK To purchase this visit following link: http://www.activitymode.com/product/acct-553-week-4-homework/ Contact us at: SUPPORT@ACTIVITYMODE.COM ACCT 553 WEEK 4 HOMEWORK ACCT 553 Week 4 Homework Page 1 Chapter 14 1. Please describe the concept of “double taxation” and discuss which entity(ies) are subject to this type of taxation. (5 pts) 2. What type of taxpayers are considered “eligible” taxpayers with regard to special ordinary loss treatment of IRC Section 1244 stock? (5 pts.) 3. Please describe how the treatment of capital gains(losses) differ for a C Corporation as compared to an Individual. ( 5 pts.) 4. Please describe the concept of “Depreciation recapture”. ( 5 pts.) Page 2 4. What is the purpose of Code Sec. 351 in regard to transfers to corporations? 20. What tax years are available to corporations? How do the options differ from other forms of business organizations? 22. What are the differences in the treatment of capital gains and capital losses of corporations and of individuals? 55. Susan Sweets is a 40 percent shareholder in Acclaim Inc., a theatrical supplies company. She transfers a fully depreciated car with a value of $2,000 to the corporation, but does not receive any consideration for it. a. What are the tax consequences to Susan? b. What are the tax consequences to the corporation? c. What, if any, changes if Susan received another 10 percent stock interest for the car? 62. A corporation has income of......

Words: 820 - Pages: 4

Acct 553 Week 1 Homework

...ACCT 553 WEEK 1 HOMEWORK To purchase this visit following link: http://www.activitymode.com/product/acct-553-week-1-homework/ Contact us at: SUPPORT@ACTIVITYMODE.COM ACCT 553 WEEK 1 HOMEWORK ACCT 553 Week 1 Homework 3-31. Tom and Linda are married taxpayers who file a joint return. They have itemized deductions of $12,250 and four exemptions. Assuming an adjusted gross income of $40,000, what is their taxable income for 2012? 3-32. Compute Marie’s taxable income for 2012, assuming she is single and claims two dependent children. Her adjusted gross income is $70,000, and she has itemized deductions of $9,000. 3-36. Compute Stanley’s taxable income for 2012, assuming he has $1,000 in wages from working in a grocery store and $2,000 in interest income from some bonds he owns. Stanley, age 16, is claimed as a dependent on his parents’ return. 13-55. Mr. Z, a non-dealer, sold assets on an installment plan. Determine Mr. Z’s gross income for 2012. Relevant data include: 13-69. Comprehensive Problem. Bill is a cash-basis, calendar-year taxpayer. Which of the following December items result in gross income or deductions for the current year? Activity mode aims to provide quality study notes and tutorials to the students of ACCT 553 Week 1 Homework in order to ace their studies. ACCT 553 WEEK 1 HOMEWORK To purchase this visit following link: http://www.activitymode.com/product/acct-553-week-1-homework/ Contact us at: SUPPORT@ACTIVITYMODE.COM ACCT 553 WEEK 1...

Words: 682 - Pages: 3

Acct 553 Week 5 Homework

...ACCT 553 WEEK 5 HOMEWORK To purchase this visit following link: http://www.activitymode.com/product/acct-553-week-5-homework/ Contact us at: SUPPORT@ACTIVITYMODE.COM ACCT 553 WEEK 5 HOMEWORK ACCT 553 Week 5 Homework (Chapter 14) • 24. What is the purpose of the dividends received deduction? What corporations are entitled to claim this deduction? What dividends qualify for this deduction? • 51. What is the purpose of the reconciliation of taxable income with book income? • 52. Sam Rogers forms a corporation. Sam transfers to the corporation property having a basis to him of $15,000 and a fair market value of $27,000 for 900 shares of the $10 par stock of the corporation. A year later, Bill Morrison, who is not related to Sam, transfers property having a basis to him of $1,000 and a fair market value of $3,000 for 100 shares of the corporate stock. The corporation issued no other stock. (a) How much gain does Sam recognize on his exchange? What is the basis to Sam of his 900 shares? (b) How much gain does Bill recognize on his exchange? What is the basis to Bill of his 100 shares? (c) What gain or loss is recognized by the corporation when it issues its shares to Sam? What is the basis to the corporation of the property it received from Sam? (d) What is the gain or loss recognized by the corporation when it issues its shares to Bill? What is the basis to the corporation of the property it received from Bill? (Chapter 17) 1. Identify and briefly describe the......

Words: 1795 - Pages: 8

Acct 553 Week 3 Homework

...ACCT 553 WEEK 3 HOMEWORK To purchase this visit following link: http://www.activitymode.com/product/acct-553-week-3-homework/ Contact us at: SUPPORT@ACTIVITYMODE.COM ACCT 553 WEEK 3 HOMEWORK ACCT 553 Week 3 Homework (Chapter 7) • 1. In your “own” words, please describe what a “Suspended Loss” is, how it is generated and when it is becomes deductible. (5 pts) • 2. Please describe “Active Participation” as it relates to a taxpayer’s involvement in an investment in Real Estate. (5 pts). (Chapter 8) • 3. Macy had a lot of medical expenses this year that were not covered by her insurance (either due to a deductible, co-insurance, or co-pay). Her un-reimbursed qualifying medical expenses total $8,356 and her AGI for 2013 is $45,000. Assuming she will itemize on her 2013 tax return, how much of her medical expenses will she be able to deduct? (5 pts) • 4. Heather & Terry have a mortgage on their primary residence of $750,000 and a mortgage on their vacation home of $410,000. In 2013, they incurred $46,400 of mortgage interest expense. How much, if any, of that interest is deductible on Schedule A? (5 pts) • 7-7 Differentiate between the following: active income, passive income, and portfolio income. • 7-13 Briefly, what is “material participation”? Why is the determination of whether a taxpayer materiallyparticipates important? • 7-46 Mary Beth is a CPA, devoting 3,000 hours per year to her practice. She also owns an office building in which she rents......

Words: 1681 - Pages: 7

Acct Week 1 Hw

...2-16 A. 2 International Auditing and Standards Board B. 2 Measures of the quality of the auditors performance C. 3 Due professional care be exercised by auditor D. 3 The Criteria of audit planning and evidence gathering 2-17 A. 2 Having appropriate system of quality control B. 1 yes, yes, yes C. 2 yes, yes, yes D. 3 Provide reasonable assurance that the integrity of the client is considered 2-19 A. Engagement Performance B. Monitoring C. Acceptance and Continuation of clients and engagements D. Engagement Performance E. Engagement Performance F. Engagement Performance G. Relevant Ethical Requirement H. Human Resources I. Human Resources J. Leadership Responsibilities 2-20 A. They first need to make sure that they understand rules and regulations of filing with the SEC. They must also do their research on mobile homes to ensure they have a good understanding of the industry. B. There are a lot of specific forms that need to be filed with the SEC when compared to dealing with a private company. Financial statements need to be reviewed. They will have to file form S-1 if they plan to issue new securities, form 8-K reports significant events that are of interest to investors, form 10-K filed annually 60-90 days after close of fiscal year, form 10-Q filed quarterly contains certain financial information and requires auditor reviews 3-23 A. 2 The report includes additional......

Words: 414 - Pages: 2

Acct 553 Wk5 Hw

...ACCT 553 Week 5 Assignment Questions 14-24 What is the purpose of the dividends-received deduction? What corporations are entitled to claim this deduction? What dividends qualify for this deduction? The purpose of the dividends received deduction is so that corporations would not be taxed at a corporate level a shareholder level or if when dividends or a recipient corporation. The dividends qualifying for the dividends-received deduction are those dividends paid by domestic corporations subject to the corporate income tax. Only dividends paid out of a corporation's earnings and profits qualify for the dividends-received deduction. Dividends-received deduction is equal to the relevant percent (70% or 80%, depending on ownership) times the lesser of: (1) dividends received from taxable, unaffiliated domestic corporations or (2) the firm's taxable income, as adjusted Page 60 of bookshelf. 14- 51 What is the purpose of the reconciliation of taxable income with book income? The purpose of the reconciliation of taxable income with book income would be to determine temporary and permanent differences. The net income on the financial books of a corporation may differ from the taxable income on its return. This is caused by differences in accounting methods between financial and taxable income. Differences are either permanent differences or temporary differences. Permanent differences are income, deduction, gain, or loss items which affect either taxable income or book......

Words: 414 - Pages: 2