Thursday, 5 November 2015


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ACCT 553 Week 1 Homework

Chapter 1 (5 pts)
1. Briefly discuss the purpose of the Sixteenth Amendment
Chapter 2 (5 pts)
2. Explain the two "safe harbors" available to an Individual taxpayer to avoid a penalty for underpayment of estimated tax.

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?
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?

ACCT 553 Week 2 Homework

Chapter 4
1. Your brother is short on cash and cannot pay his rent this month. You pay his rent for him. Is this taxable income to your brother? Do you get a deduction? (2 pts)
2. Which of the following items would be excluded from income? (a) $100 bill found under the sugar caddy at the restaurant (b) Inheritance of a car from your grandmother valued at $5,000. (c) Loan from your father-in-law to start your business, (d) Child Support received totaling $16,500. (4 pts)
Chapter 5
3. Shaun & Kayla earned the following in 2013: Interest on a Savings account of $36, Interest on a U.S. Series EE Savings Bond of $25, Interest on a CD that has not matured yet of $20. How much taxable interest income must they report on their 2013 tax return? (4 pts)
4. Explain what a Cafeteria Plan is (hint: it has nothing to do with what you eat between classes :-) ). (5 pts)
Chapter 6
5. Explain the limitations placed on the deductibility of Business Gifts? What code section dictates this treatment? (5 pts)

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)

ACCT 553 Week 3 Quiz

1. (TCO A) A taxpayer may litigate a tax dispute without first paying the tax in the:
2. (TCO F) A business bad debt is deductible for tax purposes as a(n):
3. (TCO I) Under the cash method of tax accounting, tax deductions are generally taken when:
4. (TCO A) Which of the following constitutes tax evasion?
5. (TCO C) Which of the following items is not subject to federal income tax?
6. (TCO B) Sam owes Bob $8,000. Bob cancels (forgives) the debt. The cancellation is not a gift, and Sam is bankrupt. Which of the following statements is correct concerning the impact of this transaction?
7. (TCO I) Johnny, a cash basis taxpayer, owns two rental properties. Based on the following information, compute the amount that he must include in his 2012 gross rental income.
8. (TCO F) Section 197's intangible assets, such as patents and trademarks, are amortized for tax purposes over:
9. (TCO E) Explain the constructive receipt doctrine.
10. (TCO G) Answer the following questions concerning the sources of tax law.

ACCT 553 Week 4 Homework

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.)

ACCT 553 Week 5 Homework

Chapter 14
1. Please explain how Charitable Contributions come into play in determining "Corporate" taxable income. (5 pts)
2. What happens to a loss on the Corporate Tax Return (Form 1120)? Does it pass through to the shareholders? Is it available for future or past periods? Please explain in detail. (5 pts.)
3. Please describe the purpose of Sch3edules M-1 and M-3. When is a Schedule M-3 required in lieu of a Schedule M-1. (5 pts.)
Chapter 17
4. Please define and differentiate a Spin-off, Split-off, and Split-up. ( 5 pts.)

ACCT 553 Week 5 Quiz

1. (TCO E) For federal tax purposes, royalty income not derived in the ordinary course of a business is classified as:
2. (TCO F) When comparing corporate and individual taxation, the following statements are true, except:
3. (TCO H) Al and Amy file a joint return for the 2012 tax year. Their adjusted gross income is $80,000. They had a net investment income of $8,000. In 2012, they had the following interest expenses:

Personal credit card interest: $4,000
Home mortgage interest: $8,000
Investment interest (on loans used to buy stocks): $10,000
4. (TCO B) Charitable contribution deductions for capital gains property made by individuals without a reduction for long-term capital gains to public charities are limited to:
5. (TCO A) The following taxes were paid by Tim:
Real estate taxes on his home: $2,000
State income taxes: $900
State gasoline tax (personal use of automobile): $150
6. (TCO F) Hoover, Inc. had gross receipts from operations of $230,000, operating and other expenses of $310,000, and dividends received from a 45 percent-owned domestic corporation of $120,000. Hoover's tax position for the year is:
7. (TCO G) All of the outstanding stock of a closely held C corporation is owned equally by David Smith and Steve Bufusno. In 2012, the corporation generates taxable income of $30,000 from its active business activities. In addition, it earns $20,000 of interest from investments and incurs a $40,000 loss from a passive activity. How much income does the C corporation report for 2012?
8. (TCO G) Mike, who is single, has $100,000 of salary, $15,000 of income from a limited partnership, and a $30,000 passive loss from a real estate rental activity in which he actively participates. His modified adjusted gross income is $100,000. Of the $30,000 loss, how much is deductible?
9. (TCO F) Pam owns a sole proprietorship, and Kevin is the sole shareholder of a C (regular) corporation. Each business sustained a $16,000 operating loss and a $2,500 capital loss for the year. Evaluate how these losses will affect the taxable income of the two owners?
10. (TCO G) Briefly (1) define and (2) discuss the purpose and impact of each of the following:
a. net operating loss 
b. at-risk rules
c. tax shelter

ACCT 553 Week 6 Homework

14-24, 14-51, 14-52
ACCT 553 Week 7 Homework
21-2, 21-13, 21-38, 21-51, 21-63

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