Discuss whether John is entitled to a bad debt deduction for the amount of the payment on the loan.
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A: Mr. J isn't entitled to a nasty debt deduction for the number of the payment on the loan.
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During 2016, John was the chief executive officer and a shareholder of Maze, Inc. He owned 60% of the outstanding stock of Maze. In 2013, John and Maze, as co borrowers, obtained a $100,000 loan from United National Bank. This loan was secured by John's personal residence. Although Maze was listed as a co-borrower, John repaid the loan in full in 2016. On Maze's form 1120 tax returns, no loans from shareholders were reported. Discuss whether John is entitled to a
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- 15. In 2016, Tom loaned his friend Janelle $5,000 to invest in various stocks. Janelle signed a note to repay the principal with interest. In 2017, the stock market plunged and Janelle incurred large losses. In late 2017, Janelle declared personal bankruptcy and Tom was unable to collect any of the loan. Tom had no other gains or losses in 2016 or 2017. His income from wages in both 2016 and 2017 was $50,000. The result is: a. Tom deducts a business bad debt of $5,000 in 2016. b. Tom deducts a $5,000 capital loss in 2016. c. Tom deducts a business bad debt of $3,000 in 2016 and carries $2,000 over to subsequent years. d. Tom deducts a $3,000 capital loss in 2016 and carries $2,000 over to subsequent years. e. Tom must amend her 2015 tax return to deduct the loss. 16. Agnes gives an asset valued at $12,000 with a basis of $10,000 to Mary; Agnes dies six-months later leaving an asset valued at $10,000 with a basis of $12,000 to Larry. What are Mary’s’ and Larry’s bases in these assets?…In the current year, Mary entered in to the following separate independent transactions: a) Mary sold shares of a public corporation to her husband. The shares, which had a value of $10,000 at the time of the sale, originally cost $4,000. Mary sold them to her husband for $7,000 in cash. During 2020, Mary’s husband received dividends of $500 on these shares. In January 2021, Mary’s husband sold the shares. Assume the couple do not elect out of the 73(1) rollover. b) Mary transferred shares of a public corporation with a fair market value of $8,000 to her RRSP. The shares originally cost $10,000 when first purchased by Mary. Required: (a) Describe the tax consequences, in detail, of these transactions for Mary, and her husband in 2020 and 2021.In 2013 due to some unknown reasons, he demolished the house and constructed house on the same lot. The house was completed in 2014 and decided not to stay in the same house. He sold the house in 2014 at gain of $547,000. He excluded gain of $500, 000 (exclusion allowed for MFJ) and paid capital gain on $47,000. He was audited for 2014 and IRS had a different idea. why?
- Jim, a US individual, purchases a certain rental real estate property in 2014 and leases it out producing a taxable loss of ($10,000) each year from 2014-2017. Jim has no other sources of income during any of these years. Jim sells the real estate in 2017 recognizing only a $30,000 gain on the sale. How much income (loss) does Jim report on his tax return in each of the tax years? If Jim is a real estate professional: 2014 2015 2016 If Jim is a not real estate professional: 2014 2015 2016Keka completed the following transactions in the year to December 31, 2021:Transaction 1: Sold a car for P1,200 to the uncle of Keka 's finance director.Transaction 2: Sold goods to the value of P1,400 to Serene, a company owned by the daughter of Keka 's managing director. Serene has no other connection with Keka.Which transactions, if any, require disclosure in the financial statements of Keka under PAS 24 Related Party Disclosures?This year, Major Healy paid $35,750 of interest on a mortgage on his home (he borrowed $715,000 to buy the residence in 2015; $815,000 original purchase price and value at purchase), $5,500 of interest on a $110,000 home equity loan on his home (loan proceeds were used to buy antique cars), and $8,250 of interest on a mortgage on his vacation home (borrowed $165,000 to purchase the home in 2010; home purchased for $412,500). Major Healy's AGI is $220,000. How much interest expense can Major Healy deduct as an itemized deduction? Interest Deductible
- In the early part of 2018, the partners of Hugh, Jacobs, and Thomas sought assistance from a local accountant. They had begun a new business in 2017 but had never used an accountant’s services. Hugh and Jacobs began the partnership by contributing $90,000 and $40,000 in cash, respectively. Hugh was to work occasionally at the business, and Jacobs was to be employed full-time. They decided that year-end profits and losses should be assigned as follows: Each partner was to be allocated 10 percent interest computed on the beginning capital balances for the period. A compensation allowance of $7,000 was to go to Hugh with a $17,000 amount assigned to Jacobs. Any remaining income would be split on a 4:6 basis to Hugh and Jacobs, respectively. In 2017, revenues totaled $115,000, and expenses were $87,000 (not including the partners’ compensation allowance). Hugh withdrew cash of $6,000 during the year, and Jacobs took out $11,000. In addition, the business paid $7,500 for repairs made…Mark, single, is the sole shareholder of Mark's Tool and Dye, Inc., a tool and dye manufacturing company operating as an S corporation. Mark reports qualified business income of $121,500 and he has no employees. He also has qualified dividend income of $4,400. He has no itemized deductions and claims the standard deduction of $13,850 on his 2023 Form 1040. What is Mark's qualified business income deduction? Mark's qualified business income deduction tA $ 25,180Jim, a US individual, purchases a certain rental real estate property in 2014 and leases it out producing a taxable loss of ($10,000) each year from 2014-2017. Jim has no other sources of income during any of these years. Jim sells the real estate in 2017 recognizing only a $30,000 gain on the sale. How much income (loss) does Jim report on his tax return in each of the tax years? If Jim is a real estate professional: 2014 ___________ 2015 ____________ 2016 ____________ If Jim is a not real estate professional: 2014 ___________ 2015 ____________ 2016 ____________
- Kenny Merinoff and his daughter, Mia, own all outstanding stock of flamingo Corporation. Both Mia and Kenny are officers in the corporation and together with Kenny’s Uncle, Ira, comprise the entire board of directors. Flamingo uses the cash method of accounting and has a calendar year-end. In late 2013, the board of directors adopted the following legally enforceable resolution (agreed to in writing by each of the officers): Salary payments made to an officer of the corporation that shall be disallowed in whole or in part as a deductible expense for Federal Income tax purposes shall be reimbursed by such officer to the corporation to the full extent of the disallowance. It shall be the duty of the board of directors to enforce payment of each such amount. In 2019, Flamingo paid Kenny $800,000 in compensation. Mia received $650,000. On an audit in late 2020, the IRS found compensation of both officers to be excessive. It disallowed deductions for $400,000 of the payment to Kenny and…The IRS determined that John underpaid his 2016 tax liability by $6,000 due to negligence. In 2018, John pays $1,000 of interest related to the underpayment and the full amount of any penalties assessed by the IRS. a. Calculate the amount of the accuracy-related penalty that could be assessed by the IRS in this situation. b. What part of the deficiency, income taxes, interest, and penalty, is deductible by John on his current tax return? Explain.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
