Exercise 6-26 (Algorithmic) (LO. 2)Shanna, a calendar year and cash basis taxpayer, rents property to be used in her business from Janice. As part of the rental agreement,Shanna pays $21,400 rent on April 1, 2022, for the 12 months ending March 31, 2023.Do not round any division.a. How much is Shanna's deduction for rent expense in 2022?21,800 Xb. Assume the same facts, except that the $21,400 is for 24 months' rent ending March 31, 2024. How much is Shanna's deduction forrent expense in 202278,175 XFeedbackCheck My WorkA taxpayer's accounting method is a major factor in determining taxable income. The method used determines when an item is includible inincome and when an item is deductible on the tax return.

A cash-basis taxpayer reports income when it is actually received and reports expenses when they are…

Answered: Channa, a calendar year and cash be

Business

Accounting

Channa, a calendar year and cash be

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter5: Business Deductions

Section: Chapter Questions

Problem 1CE

See similar textbooks

Related questions

Q: How do we report the $1000000 in the financial statement?

A: Contingent Liability - A contingent liability is a potential obligation arising from past events.…

Q: 28. The average length of time between the purchase of raw material and labor and the payment of…

A: For a company to generate cash, the process begins with purchasing raw materials which are then…

Q: here are two categories of cash flows: single cash flows, referred to as “lump sums,” and annuities.…

A: these are some of the statements about annuities that are true An annuity due is an annuity that…

Q: sum of the years digit method

Q: How to make a personal financial statement?

A: Personal Dinancial statement is a summary statement of individual financial position, it contains…

Q: Amounts of interest depend on lengths of time.Explain how?

A: Interest is also dependent on the base of the length of time A loan taken for a long period of time…

Q: 7. Future value of annuities There are two categories of cash flows: single cash flows, referred to…

Q: Do time lines deal only with years, or can other time periods be used?

A: The term time line refers to list of events which take place in chronological order. Timelines are…

Q: What is the purpose of the accrual tranche?

A: The diverse CMO bunches are known as a tranche. Gathering tranche too known as Z tranche is the…

Q: vo categories of cash flows: single cash flows, referred to as "lump sum:

A: “Since you have posted a question with multiple sub-parts, we will solve the first three subparts…

Q: Do we add in notes payable due 2024 into our statement of cashflows when the balance sheet has dates…

A: The cash flow statement is one of the components of the financial statement which is prepared at the…

Q: A fixed stream of cash flows occurring at the beginning of each period for a fixed period of time is…

A: A study that proves that the future worth of the money is lower than its current value due to…

Q: Amount of money borrowed or invested on the origin date.

A: Initial Investment - Owner of the organization either borrowed money or invested their own fund to…

Q: In order to be classified as a cash equivalent, an investment mus have a maturity date of a. Less…

A: Reason : They are viewed as so low risk that they are virtually the same as cash . To…

Q: Explain the difference between an ordinary annuity and an annuity due situation.

A: Annuity: It is amount of money payable to an individual at a periodic basis which is normally a…

Q: what give rises to the changes in the balance of planned assets? A- cash contributions B- cash paid…

A: Plan assets are long term investment fund held for employee benefits. And only purpose of paying…

Q: How do you take the present value of a stream of cash flows. How does it work for annual payments,…

A: Present value of cashflows is the value of money that is to be received in future.

Q: Explain how to calculate day’s sales in receivable.

A: Average collection period: Average collection period indicates the number of days taken by a…

Q: Calculate the arithmetic average of the following returns. Year Return 1 0.12 20.16 3 0.24 4 0.13…

A: The arithmetic average of the return refers to the simple average of the given return for…

Q: Which of the following is an appropriate method of computing free cash fl ow to the fi rm? A . Add…

A: Free cash flow to the firm is the amount of cash flows from the operational activities of a firm…

Concept explainers

Budgeted Income Statement

Accounting is the process of recording business-related financial transactions. The process of accounting involves summarizing and analyzing the transactions. The financial statements which are prepared in accounting contain a summary of the various transactions that took place within a certain accounting period. Book-keeping or accounting is one of the most important activities of any business.

Question

Exercise 6-26 (Algorithmic) (LO. 2)
Shanna, a calendar year and cash basis taxpayer, rents property to be used in her business from Janice. As part of the rental agreement,
Shanna pays $21,400 rent on April 1, 2022, for the 12 months ending March 31, 2023.
Do not round any division.
a. How much is Shanna's deduction for rent expense in 2022?
21,800 X
b. Assume the same facts, except that the $21,400 is for 24 months' rent ending March 31, 2024. How much is Shanna's deduction for
rent expense in 20227
8,175 X
Feedback
Check My Work
A taxpayer's accounting method is a major factor in determining taxable income. The method used determines when an item is includible in
income and when an item is deductible on the tax return.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Meaning of cash basis

VIEW

Step 2: Taxable expense for 2022

VIEW

Solution

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Exercise 6-26 (Algorithmic) (LO. 2) Shanna, a calendar year and cash basis taxpayer, rents property to be used in her business from Janice. As part of the rental agreement, Shanna pays $11,800 rent on April 1, 2020 for the 12 months ending March 31, 2021. Do not round any division. a. How much is Shanna's deduction for rent expense in 2020? b. Assume the same facts, except that the $11,800 is for 24 months' rent ending March 31, 2022. How much is Shanna's deduction for rent expense in 2020?
Self-Study Problem 2.13 A taxpayer (payor ex-spouse) is required to pay an ex-spouse (recipient ex-spouse) alimony of $12,000 per year. Determine how much alimony is deductible by the payor ex-spouse and how much alimony is recognized as income by the recipient ex-spouse based on the following information: If an answer is zero, enter "0". Details a. The payments are made in 2021 as part of a divorce decree executed in 2018. The divorce decree is modified in 2021 to explicitly apply the provisions of the TCJA. b. The payments are made in 2021 as part of a divorce decree executed in 2016. c. The payments are made in 2021 as part of a divorce decree executed in 2021. Deductible by payor Includable by recipient 00 00
Subject : Accounting
vin.3
Exercise 13-25 (Algorithmic) (LO. 1) Sally owns real property for which the annual property taxes are $16,030. She sells the property to Kate on April 2, 2021, for $801,500. Kate pays the real property taxes for the entire year on October 1, 2021. Assume a 365-day year. Round any division to four decimal places. Round your final answers to the nearest dollar. a. How much of the property taxes can be deducted by Sally and how much by Kate? Sally can deduct $ 3,997 x and Kate can deduct s Feedback b. What effect does the property tax apportionment have on Kate's adjusted basis in the property? Kate's adjusted basis for the property is increased ✓by the s Feedback 12,033 X of the property taxes. c. What effect does the apportionment have on Sally's amount realized from the sale? Sally paid none of the real property taxes and is realized is increased ✔by this amount. Feedback she paid that is apportioned to Sally. ✔permitted to deduct the apportioned share of s d. How would the answers in…
Compute Sandee’s 2021 net rental income
Question 7. Mario, who is single and elects to itemize, rents his mountain house for 210 days and uses it for personal use for 25 days during the year, not a leap year. Income and expenses associated with the property are: Rental income Mortgage interest payments Property tax payments Depreciation Utility payments Maintenance payments $ 24,000 12,000 8,000 7,000 5,000 4,000 If Mario is allowed a choice, Mario would choose to use the court approach to allocating mortgage interest and property taxes. Determine the amount of expense that Mario would deduct from AGI on his current year tax return associated with the mountain house. a) $32,493 b) $8,493 c) $851 d) $24,000 e) $2,128
! Required information [The following information applies to the questions displayed below.] Alexa owns a condominium near Cocoa Beach in Florida. This year, she incurs the following expenses in connection with her condo: Insurance Mortgage interest Property taxes Repairs & maintenance Utilities Depreciation $ 2,050 7,450 4,200 650 4,650 23,700 During the year, Alexa rented out the condo for 137 days. Alexa's AGI from all sources other than the rental property is $200,000. Unless otherwise specified, Alexa has no sources of passive income. Assume that in addition to renting the condo for 137 days, Alexa uses the condo for 8 days of personal use. Also assume that Alexa receives $47,750 of gross rental receipts and her itemized deductions exceed the standard deduction before considering expenses associated with the condo and that her itemized deduction for non-home business taxes is less than $10,000 by more than the real property taxes allocated to rental use of the home. Answer the…
Subject-Accounting
Problem 7: Exclusions from income Annie Wilkes is a single taxpayer who reports the following transactions during 2022: ● At her part time job she uses the gym on the company premises that is available to all employees. The total value of the gym membership is $1,500 • She receives $700 a month from an annuity she purchased on 1/1/2020 for $50,000 when she was 35 years old (which is also the age she began receiving payments). The annuity will pay her for the rest of her life. • She received $20,000 from the University of Kansas. Of this, $2,000 represented a scholarship to cover tuition, $17,000 a stipend to assist with living expenses, and 1,000 for book purchases. She received a refund of $2,000 for a contribution to her health savings account (HSA) made in 2021. ● Required: How much of the above transactions will be excluded from Annie's income for 2022?
please help me
6