QUESTION 3Daniel, an electrical engineer, resigned from Tenaga Nasional Berhad to start his owntrading in electrical goods. He required the following assets:Furniture and fittingsA computerA cash registerA vanAlthough he has sufficient savings to pay by cash he has been told that leasing is abetter way to pay for the assets.The estimates of his annual income from other sources are as follows:RMAdjusted rental income from a condominium in Kuala LumpurGross dividends from companies listed on Bursa Malaysia47,0003,000Daniel has come to you for advice as how to commence business as sole-proprietorfrom the tax perspective.3(i)Explain to Daniel how the date of commencement of his business is determined andwhat tax implications that this might have on him.3(ii) Illustrate, with examples, how the period chosen for Daniel's first accounting periodaffects the determination of his tax basis periods. He will close his accounts on 31December.3(iii) Explain to Daniel why leasing is sometimes better than other method of financingfrom the tax viewpoint5

Here given the details of commencement of business which can be influence in taxation affairs and…

Explain to Daniel how the date of commencement of his business is determined and what tax implications that this might have on him. i) Illustrate, with examples, how the period chosen for Daniel's first accounting period affects the determination of his tax basis periods. He will close his accounts on 31 December.

Explain to Daniel how the date of commencement of his business is determined and what tax implications that this might have on him. i) Illustrate, with examples, how the period chosen for Daniel's first accounting period affects the determination of his tax basis periods. He will close his accounts on 31 December.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Meredith owns her own business. In 2020, she had business revenue of $268,450 and business deductions of $75,900. She had no other activity that affected her tax return.a. Calculate her self-employment tax.b. Calculate her AGI.
Julie filed a valid extension for her 2020 tax return, giving her until October 15, 2021, to file her return. She filed her return on November 1 and paid $2,000 of tax due. For what period of time will Julie be subject to interest? For what period of time will Julie be subject to the failure-to-file and failure-to-pay penalties?
An individual has year-to-date earnings prior to the current period of $138,500, earns $3,600 during the current period, and has a tax return filing status of single. Her self-employment taxes are $__________
Camila timely filed her 2020 tax return on April 15, 2021. Under ordinary circumstances, what is the last day she can file an amended tax return? April 15, 2023; October 15, 2023; April 18, 2024; October 15, 2024
In 2019, Martin had two employers during the year. Both employers withheld Social Security tax from his wages in the amounts of $4,314.05 and $4,274.75. What amount can Martin claim as a credit against his income tax when he files his income tax return? . $0B. $349C. $1,186D. $8,235
A(n) Dora Burch files her 2022 income tax return on March 2, 2023. She receives an original notice of assessment dated June 3, 2023. However, on December 28, 2023, she receives a reassessment indicating that she owes a substantial amount of additional tax. She would like to object to this reassessment. What is the latest date for her to file a notice of objection? She does not carry on a business. (Ignore the business sells goods that it effect of leap year if applicable.) purchases in finished form for resale. March 2, 2024. April 30, 2024. March 28, 2024. Shy December 28, 2024.
Determine the amount of taxable income that should be reported by a cash-basis taxpayer in 2022 in each of the following independent cases: Required: a. A taxpayer completes $700 of accounting services in December 2022 for a client who pays for the accounting work in January 2023. b. A taxpayer is in the business of renting computers on a short-term basis. On December 1, 2022, she rents a computer for a $260 rental fee and receives a $650 deposit. The customer returns the computer and is refunded the deposit on December 20, 2022. c. Same facts as (b) except that the computer is returned on January 5, 2023. d. On December 18, 2022, a landlord rents an apartment for $625 per month and collects the first and last months' rent up front. It is customary that tenants apply the security deposit to their last month's rent upon moving out. e. An accountant agrees to perform $395 of tax services for an auto mechanic who has agreed to perform repairs on the car of the accountant's wife. The…
As a tax return preparer for The Fernando Rodriguez Tax & Accounting Service, you have been asked to calculate the missing information for one of the firm's tax clients. The following table gives the standard deduction for various filing statuses. Standard Deductions Single or married filing separately $12,000 Married filing jointly or surviving spouse $24,000 Head of household $18,000 65 or older and/or blind and/or someone else can Varies claim you (or your spouse (See www.irs.gov for information.) if filing jointly) as a dependent: Using the standard deduction table above, complete the following table (in $). Name Filing Status Income Adjustments to Adjusted Gross Income Income Itemized Taxable Deductions Income Lerner married filing jointly $ $1,377 $47,278 $5,329 $ When finding your client's taxable income, which deduction did you use? O standard deduction O itemized deductions Standard Deduction $ ---Select--- v
Which of the following statements about extensions of time to file certain business income tax returns is true? a)It is required of mostentities to us e electronic funds transfer to make all federal tax deposits. b) The IRS will send taxpayers a notification if their request for an extension is approved. c) Property filing the form wil not automatically give taxpayers the maximum extension of time to file allowed. d) The maximum extension of the to file allowed from the due date of the taxpayer's business return is generally three months.
For the following taxpayers, determine if they are required to file a tax return in 2023. Problem 8-80 Part a (Algo) a. Ricko, single taxpayer, with gross income of $15,800.
The deadline to file a gift tax return is December 31 of the year after the calendar year in which the gift is made. True False