Homework 1 – Chapter 1 1. In the following independent situations‚ is the tax position of the tax payer likely to change? Explain why or why not. a) Yes‚ this is likely to change John’s tax position because of capital gains and losses on the disposition because of property now convert to ordinary income and losses. b) Yes‚ this is likely to change Theresa’s tax position because now she is self employed and has to deal with the safe harbor of withholdings is lost and new quarterly payments on
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2010 166 Your social security number Alice Johnson 222-23-3334 CAUTION ! To take the making work pay credit‚ you must include your social security number (if filing a joint return‚ the number of either you or your spouse) on your tax return. A social security number does not include an identification number issued by the IRS. Only the Social Security Administration issues social security numbers. You cannot take the making work pay credit if you can be claimed as someone else’s
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Problem Set 2 – Strategy I 1. Why do price misreads (or more generally the inability to observe prices with precision) encourage firms to lower prices? [Note: assume all prices are subject to misreads.] Misreads occur when a firm are competing with no information about competitors and assumes that competitors have taken an uncooperative pricing action when in fact they are cooperative. This assumption makes the firm react in an uncooperative manner‚ lowering the price. This asymmetric information
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a result of theft. Sec. 165 (a)‚ (e). In order to be able to claim the casualty loss deduction the loss must qualify as theft‚ the tax payer must prove the amount of loss due to theft and the taxpayer must also prove the date the theft was discovered. As mentioned in both Robert S. Gerstell‚ 46 T.C. 161 (1966)‚ and Michael Monteleone‚ 34 T.C. 688 (1960)‚ “for tax purposes‚ whether a theft loss has been sustained depends on the law of the jurisdiction wherein the particular loss occurred.” In
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delays throughout the shipping process. On March 28‚ 2008‚ Brandy Corporation first used its new air conditioning unit. Issues 1. What year should Brandy Corporation recognize the air conditioning unit was first put into service? 2. How much is their deduction for that year with regards to MACRS recovery deduction? Discussion and Analysis 1. Code Section 168(i)(6) provides the treatments of additions or improvements to property. It states that in the case of any addition to (or improvement
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Pension Plan $ 675 • Reimbursement of Stoiche’s tennis club dues (including taxes) $ 1‚475 Fasco Ltd. provided Stoiche with an automobile and paid the operating costs for the entire year‚ totalling $4‚250. Fasco Ltd. purchased the automobile on January 1‚ 2011‚ at a cost of $14‚000 including taxes. In 2011‚ Stoiche drove 20‚000 kilometres‚ 15‚000 of which were for personal use. In 2011‚ his wife travelled with him to Montreal when Stoiche attended a five-day seminar for engineers. Fasco Ltd. reimbursed
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ach01 Student: 1. 2. Taxes influence many types of business decisions but generally do not influence personal decisions. True False Taxes influence business decisions such as where a business should locate or how a business should be structured. True False Tax policy rarely plays an important part in presidential campaigns. True False Margaret recently received a parking ticket. This is a common example of a local tax. True False George recently paid $50 to renew his driver’s license. The
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DQ 1 Why is tax minimization different from efficient tax planning? Effective tax planning involves considering the role of taxes when implementing the decision rule of maximizing after-tax returns. Tax-minimization does not aim to maximize after-tax returns‚ so it may be undesirable. Tax minimization can introduce significant costs along nontax dimensions. Tax minimization may not consider risks and costs‚ so may not catch the some profitable chances. But‚ effective tax planning always consider
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May 3‚ 2010 Tax File Memorandum Subject Peaceful Pastures Funeral Home Incorporated prepaid income treatment. Facts Peaceful Pastures Funeral Home Inc. is an accrual basis taxpayer who sells prepaid goods and services to clients that will be provided for them at the time of their death. Goods and services are refundable upon the purchasers request at any time until the contracts are fulfilled. Peaceful Pastures Funeral Home Incorporated is in need of determining the period of recognition
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I would like to begin by saying thank you for the opportunity to provide our company with some ideas on how to make the best of this disappointing situation. My goal is to help us find the best solution to remain a growing‚ profitable company. After doing some research and crunching the numbers‚ I have determined four main options for the future of the company. I will outline the advantages and disadvantages for each of these choices for you and give recommendations as well. The first option we
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