13. In 2016, King, an employee of Advanced Corporation, is indebted to PhilipCorporation in the amount of P50,000. He has also a liability with Rex ofP25,000. During the year, the Board of. Directors of Philip Corporatondecided to condone his liability, he being a stockholder of said corporation.To be relieved of his liability, King was required by Rex to work in hisrestaurant for two (2) months as waiter. As a consequence, King filed hisvacation leave from Advanced Corporation for the same period therebyreceiving the monetized value of his leave credits in the amount of P6,000.While working as waiter in the restaurant, he received tips from theCS Scanned with CamScanner customers totaling to P5,000. Said amount was not accounted anymore byRex. How much is the taxable income of King in 2016?a.P 36,000C.30,000b.25,000d.86,000CS Scanned with CamScanner

Amount owed to Philip corporation = 50,000 Liability to Rex = 25,000 Income from tips = 5,000 Income…

Answered: 13. In 2016, King, an employee of…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Jeremy earned $100,000 in salary and $6,000 in interest income during the year. Jeremy’s employer withheld $10,000 of federal income taxes from Jeremy’s paychecks during the year. Jeremy has one qualifying dependent child (age 14) who lives with him. Jeremy qualifies to file as head of household and has $23,000 in itemized deductions, including $2,000 of charitable contributions to his church. (Use the tax rate schedules.) b. Assume that in addition to the original facts, Jeremy has a long-term capital gain of $4,000. What is Jeremy’s tax refund or tax due including the tax on the capital gain?
Bruce and Amanda are married during the tax year. Bruce is a botanist at Green Corporation. Bruce earns a salary of $56,000 per year. Green Corporation has an accountable reimbursement plan. During the year, Bruce has $5,000 of employee expenses. Green Corporation reimburses Bruce for only $4,000 of expenses.Bruce decides to put $5,500 into a Traditional IRA. Amanda owns a financial consulting firm as a sole proprietor (it qualifies as a full trade or business). Amanda generates $80,000 of revenues during the year. She has the following business payments associated with her firm:● Utilities: $2,000● Office Rent: $14,000● Self-Employment Tax: $5,000● Salary for her secretary: $20,000● Fines/Penalties: $8,000● Payroll Taxes (Employer Portion): $1,000● Business Meals: $2,000● Bribe to police officer to forgive parking violation $1,500Due to the income and expenses above, Amanda has $39,500 of Qualified Business Income. Also, during the year a tornado damaged the roof of their personal…
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7
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Farell is a member of Sierra Vista LLC. Although Sierra Vista is involved in a number of different business ventures, it is not currently involved in real estate either as an investor or as a developer. On January 1, year 1, Farell has a $199,000 tax basis in his LLC interest that includes his $179,000 share of Sierra Vista's general liabilities. By the end of the year, Farell's share of Sierra Vista's general liabilities have increased to $199,000. Because of the time he spends in other endeavors, Farell does not materially participate in Sierra Vista. His share of the Sierra Vista losses for year 1 is $238,000. As a partner in the Riverwoods Partnership, he also has year 1, Schedule K-1 passive income of $18,000. Farell is single and has no other sources of business income or loss. a-1. Determine how much of the Sierra Vista loss Farell will currently be able to deduct on his tax return for year 1. a-2. List the losses suspended due to tax-basis, at-risk, and passive activity…
6
Farell is a member of Sierra Vista LLC. Although Sierra Vista is involved in a number of different business ventures, it is not currently involved in real estate either as an investor or as a developer. On January 1, year 1, Farell has a $126,000 tax basis in his LLC interest that includes his $115,000 share of Sierra Vista's general liabilities. By the end of the year, Farell's share of Sierra Vista's general liabilities have increased to $126,000. Because of the time he spends in other endeavors, Farell does not materially participate in Sierra Vista. His share of the Sierra Vista losses for year 1 is $153,000. As a partner in the Riverwoods Partnership, he also has year 1, Schedule K-1 passive income of $7,000. Farell is single and has no other sources of business income or loss. D. Assuming the original facts and that Farell is deemed to be an active participant in Sierra Vista, and he also has a $272,000 loss from a sole proprietorship, determine how much total trade or business…
2. On November 5, 2021, a DEF Corporation's truck was in an accident with an auto driven by Mr. Dela Cruz. DEF received notice on January 12, 2022 of a lawsuit for P700,000 damages for personal injuries suffered by Mr. Dela Cruz. DEF Corporation's counsel believes it is probable that Mr. Dela Cruz will be awarded an estimated amount in the range between P200,000 and P450,000, and that P300,000 is a better estimate of potential liability than any other amount. DEF's accounting period ends on December 31, and the 2021 financial statements were issued on March 2, 2022. What amount of loss should DEF accrue at December 31, 2021?

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