Brenda and Kipp are not related During 2021, Brenda loans Kipp $30,000, which he intends to use to establish a small business Under the terms of the loan Kipp agrees to repay Brenda the $30,000 plus interest (at a reasonable stated rate) over a five-year period. The business is unsuccessful and Kipp is forced to file for bankruptcy in 2022 By the end of 2022, it is estimated that the creditors will receive only 45% of the amount owed In 2023 the bankruptcy proceedings are closed, and the creditors receive 15% of the amount due on the debt Requirement What is Brenda's bad debt deduction for 2022? For 2023? (Complete all input fields Enter a 0 if no bad debt deduction can be taken) Brenda's bad debt deduction for 2022 will be Brenda's bad debt deduction for 2023 will be

Brenda and Kipp are not related During 2021, Brenda loans Kipp $30,000, which he intends to use to establish a small business Under the terms of the loan Kipp agrees to repay Brenda the $30,000 plus interest (at a reasonable stated rate) over a five-year period. The business is unsuccessful and Kipp is forced to file for bankruptcy in 2022 By the end of 2022, it is estimated that the creditors will receive only 45% of the amount owed In 2023 the bankruptcy proceedings are closed, and the creditors receive 15% of the amount due on the debt Requirement What is Brenda's bad debt deduction for 2022? For 2023? (Complete all input fields Enter a 0 if no bad debt deduction can be taken) Brenda's bad debt deduction for 2022 will be Brenda's bad debt deduction for 2023 will be

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Noelle's diamond ring was stolen in 2017. She originally paid $15,400 for the ring, but it was worth considerably more at the time of the theft. Noelle filed an insurance claim for the stolen ring, but the claim was denied. Because the insurance claim was denied, Noelle took a casualty loss deduction for the stolen ring on her 2017 tax return. In 2017, Noelle had AGI of $77,000. After Noelle threatened legal action in early 2019, the insurance company had a "change of heart" and sent Noelle a check for $9,240 for the stolen ring. The per-event floor is $100. What is the proper tax treatment of the $9,240 Noelle received from the insurance company in 2019? Noelle should _______the amount of______.
During 2021, William purchases the following capital assets for use in his catering business: New passenger automobile (September 30). $64,000 Baking equipment (June 30) 10,000 Assume that William decides to use the election to expense on the baking equipment (and has adequate taxable income to cover the deduction) but not on the automobile (which has a 5-year recovery period), and he also uses the MACRS accelerated method to calculate depreciation but elects out of bonus depreciation. Calculate William's maximum depreciation deduction for 2021, assuming he uses the automobile 100 percent in his business.
Riley Company promises to pay Janet Anderson or her estate $150,000 per year for the next 10 years, even if she leaves the company or passes away to try to induce her to stay with the company. Riley Company wants to properly record this transaction as deferred compensation. Riley Company purchased a whole life insurance policy for Janet, naming the company as the beneficiary. Reed Company wants to determine if it can offset the cash surrender value of the life insurance policy against the deferred compensation liability.
On June 15, 2023, Chang purchases $2,937,000 of equipment (seven-year property) for use in their business. It is their only purchase of business property in 2023. Chang has taxable income from their business of $2.5 million before any cost recovery. Click here to access depreciation Table 8-2. (If required, round your answers to the nearest dollar.) a. Assuming Chang does not elect Section 179 and elects out of bonus depreciation, what is their total 2023 cost recovery? $ 419,697 b. Assuming Chang elects the maximum Section 179 deduction allowable and elects out of bonus depreciation, what is their total 2023 cost recovery? 2,937,000 × $ c. Assuming Chang elects the maximum Section 179 deduction allowable and does not elect out of bonus depreciation, what is their total 2023 cost recovery? 2,937,000 ×
Sandra acquires a new machine (7-year property) for her business on March 10, 2020, at a cost of $430,000. Sandra makes the election to expense the maximum amount under §179, and wants to take any additional first-year depreciation allowed. No election is made to use the straight-line method. Determine the total deductions in calculating taxable income related to the machine for 2020 assuming Sandra has taxable income of $500,000.
On May 1, 2020, Anthony was in an automobile accident while on his way to work. Following doctor’s advice, Anthony stayed home for six months to recover from his injuries. While at home, Anthony filed a lawsuit against the other driver. On December 1, 2020, the lawsuit was settled and Anthony received the following amounts: Compensation for lost wages $30,000 Personal injury damages (none of which was for punitive damages) 50,000 How much of the settlement must Anthony include in ordinary income on his 2020 tax return?
Jessica sold goods to Stacy for $2,500 and retained a security interest in them. Two months later, Stacy filed a voluntary petition in bankruptcy. At this time, Stacy still owed Jessica $2,000 for the purchase price of the goods, the value of which was $1,500. a. May the trustee invalidate Jessica’s security interest? If so, under what provision? b. If the security interest is invalidated, what is Jessica’s status in the bankruptcy proceeding? c. If the security interest is not invalidated, what is Jessica’s status in the bankruptcy proceeding?
Helena has the following long-term capital gains and losses for 2019: $94,000 28% gain, $75,200 28% loss, $42,300 25% gain, and $37,600 0%/15%/20% loss. She also has a $47,000 short-term loss and a $84,600 short-term gain. She has no other income. a. What is Helena’s AGI from these transactions? b. If she has a net long-term capital gain, what is its makeup in terms of the alternative tax rates?Helena has a net LTCG of ___________, all of which is 25% gain 37600 net STCG.
Skip rented an office building to Chris for $1,000 per month. On December 29, 2018, Skip received a deposit of $7,000 in addition to the first and last months' rent. Occupancy began on January 2, 2019. On July 15, 2019, Chrisclosed his business and filed for bankruptcy. Skip had collected rent for February, March, and April on the first of each month. Skip had received May rent on May 10, but collected no payments afterwards. Skip withheld $1,000 from the deposit because of damage to the property and $500 for unpaid rent. He refunded the balance of the deposit to Chris. Requirement What amount would Skip report as gross income for2018? for 2019? Begin by selecting the labels to show the items that will comprise Skip's 2018 gross income, and then enter the amounts to compute the 2018 gross income amount. (If an input field is not used, leave the input field(s) empty; do not select a label or enter a zero.) Taxable item 2018 Gross income…
During 2020, Brandi loans her brother Keefer $40,000, which he intends to use to establish a small business. Because Keefer has no other assets and needs cash to establish the business, the agreement provides that Keefer will repay the debt if (and when) sufficient funds are generated from the business. Brandi and Keefer do not establish an interest rate. The business is unsuccessful, and Keefer is forced to file for bankruptcy in 2021. By the end of 2021, it is estimated that the creditors will receive only 50% of the amount owed. In 2022 the bankruptcy proceedings are closed, and the creditors receive 25% of the amount due on the debt. Requirement What is Brandi's bad debt deduction for 2021? For 2022? (Complete all input fields. Enter a "0" if no bad debt deduction can be taken.) Brandi's bad debt deduction for 2021 will be Brandi's bad debt deduction for 2022 will be
K purchased all 100 shares of N Corporation in 2008 for $50,000.N Corporation adopts a plan of liquidation on January 1, 2017.On May 1, 2017, N sells its only asset, land, for $10,000 cash and an installment note with a face amount and fair market value of $90,000.On January 8, 2018, N distributes the cash and note to K.On her 2017 tax return, K will report the following as gain or loss from the liquidation.(Assume no collections on the installment note during 2017) A)$0B)$5,000C)$50,000D)$100,000
Jean Brochet uses an automobile in a business he carries on as a sole proprietor. The automobile cost $53,000 in 2022 and is not a zero-emission vehicle, with maximum CCA claimed in that year. Assume that the automobile was eligible for the Accll. The purchase was financed with a bank loan of $37,000. In 2023, the interest on this loan totaled $4,440. The automobile is used exclusively for business purposes, with the 2023 operating expenses totaling $7,500. What is the maximum automobile deduction that can be claimed for 2023? $19,875. $16,760. $16,890. $24,665.