Citations: 106 S.Ct. 2092 Supreme Court of the United States Argued April 23‚ 1986.Decided June 3‚ 1986. Held: Respondent was entitled to claim the deductions in question. Pp. 2095-2100. (a) The “all events” test prescribed by the Treasury Regulations requires that before an expense can be regarded as “incurred” for federal income tax purposes‚ a liability must be fixed and absolute. Pp. 2096-2097. (d)
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Support: IRC Sec. 162 Treas. Reg. 1.162-2(a) Com. v. Lincoln Electric Co.‚ (1949‚ CA6) 38 AFTR 411‚ 176 F2d 815. Kurzet v. Comm.‚ 86 AFTR‚ 2d 5655. IRC Sec. 183 IRC Sec. 212 John J. Ballard‚ TCM 662 (1984). Analysis: IRC Sec. 162 allows the deduction of all ordinary and necessary
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acquired through induction or deduction. Induction involves reasoning from the particular to the general. E.g. Scientists may observe instances of a natural phenomenon and derive a general law (inductive). Newton’s Laws are an example of this as he produced laws that made sense of what he observed (observing behaviour of physical objects). Deduction involved reasoning from the general to the particular‚ starting with a theory and looking for instances to confirm this (deduction). Scientific knowledge
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Partners are taxed on their allocable share of income whether it is distributed or not. 5) Which of the following is an advantage of a sole proprietorship over other business forms? A. Ease of formation B. The deduction for compensation paid to the owner C. Tax-exempt treatment of fringe benefits D. Low tax rates on dividends 6) Which of the following statements is incorrect? A. S corporation losses can offset
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not have the character of income: For tax law purposes we need to distinguishing income and capital for several reasons: a) ordinary concepts notion of income does not include capital; [see below] b).general deductions [and some specific deductions‚ eg: repairs] specifically excludes deductions for capital outlays c) capital receipts may generate capital gains CGT; concessional tax treatment; the gain might be discounted by 50%. d) trust distribution of corpus [capital] is not assessable income •
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1. The assessability or otherwise to Jino and Anna of the annual bonuses paid by Darling Bank to them. Consideration of the proximity of services or employment relationship‚ the importance of the donor’s motive and the status of gratuitous payments are relevant in determining whether the bonuses received are assessable income. We can determine that the bonuses satisfactorily fulfil the requirement that for the bonuses to be assessable they must “come in”.(tenant v smith) Natural incidents of
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problems and has previously claimed the additional standard deduction available to blind taxpayers. This year‚ Larry was prescribed a new type of lens that vastly improved his vision. However‚ he began to suffer severe pain‚ infection‚ and ulcers from the lens‚ and had to remove the lens. The doctor said he could continue to wear the contact lens‚ but only for short time periods. The issue is if Larry is able to claim the additional standard deduction to blind taxpayers. The case at hand is Emanuel
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Under Section 165 taxpayers are allowed to deduct uncompensated losses sustained in the taxable year as 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
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withholding are the percentage method and the wage bracket method. True If taxpayers fail to provide their bank with an identification number‚ they are subject to backup withholding on interest payments. True Taxpayers with large amounts of deductions may claim extra withholding allowances on their Form W-4s. True A nondeductible penalty is imposed on underpayments of estimated taxes False If a taxpayer discovers that his or her original calculation for an estimated tax payment was inaccurate
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* $1‚447.30 ~weekly net income * $1‚447.30 – $18.81 ~health insurance deduction * $1‚447.30 - $29.80 ~gas & electricity deduction‚ city price * $1‚447.30 - $29.23 ~gas & electricity deduction‚ country price * $1‚447.30 - $150 ~weekly recreational
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