income should be declared by Palmon
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Palmon is indebted to Pai Chan. Due to his inability to pay the debt, Palmon was asked to clean the piggery of Pai Chan for three months. Thereafter, Pai Chan gave Palmon P5,000 and condoned the debt amounting to P10,000. How much income should be declared by Palmon?
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- Which taxpayer may benefit from the investment interest expense deduction? A. Everett. He borrowed money from his broker and used the funds to buy tax-exempt bonds. He paid interest on the loan. B. Frank. He opened a margin account with his broker, as he wanted access to a line of credit. He did not borrow any money from the account during the year. C. Marissa. She borrowed money from her broker to buy shares of stock for her investment account. She paid interest on the loan. D. Roberta. She borrowed money on her margin account and used the funds for a home-improvement project. She paid interest on the loan.Jill is self-employed in the commercial plant care business. The business earned $120,000 in revenue and has $36,000 in business expenses. How much does Jill owe in FICA taxes? Select answer from the options below $11,868.82. $16,955.46. $12,852.00. $18,360.00.For each of the following situations, indicate the nature and amount of the penalty that could be imposed. Description of the Penalty AND Penalty Amount $ a. Larry is a tax protester and files his tax return in the name of “Mickey Mouse.” b. Anne writes a check for $900 in payment of her taxes that she knows will not clear the bank due to insufficient funds in her account. c. Gerald understated his tax liability by $10,000. The total amount of tax that should have been shown on his return was $70,000.
- Sidney is a car salesman. As a result of being the best salesman for the year, his employer permits him to buy a new BMW with a cost of Fair Market Value to the dealer of $40,000 for only $25,000. This is to be Sidney's personal vehicle and not used in business. As a result of this purchase, Sydney must report. Zero Income or Loss $40,000 income $15,000 income $20,000 incomeJuan died with a receivable collectible from Ernest Rutherford. Ernest Rutherford has assets amounting to P400,000, and liabilities amounting to P1,000,000, and included among Ernest's liabilities is an obligation on unpaid taxes payable to the government amounting to P100,000. Neils also mortgaged his property to the bank in consideration for a loan worth P1,000,000. The property is worth P1,500,000. P300,000 of the loan was paid by Niels before her death. How much may Neils' estate claim as deduction for claims against insolvent persons? P100,000 P120,000 P180,000 P200,000Mercedes is a recipient of Ulirang Inay Award in Baguio City. She received a plaque and cash prize of P100,000 from the sponsors. Ulirang Inay Award is given by the City Government of Baguio to those mothers who showed exemplary actions as a mother. Mercedes received the award without any effort on her part. How much should be withheld as final tax from the cash prize received by Mercedes? a. P0 b. P10,000 c. P20,000 d. P25,000 e. Answer not given
- Bing, resident citizen, operated her online selling without permit to engage in business. During the year, she earned a total income of P900,000. How much is the taxable income? A. ZERO B. 650,000 C. 900,000Hw.37.Sydney qualifies for the home office deduction. Her office is 240 square feet and her entire home is 3,000 square feet. She earned a net profit of $2,500 from her business before deducting any home office expenses. During the year, she paid $9,600 of mortgage interest, $1,200 of property taxes, $800 for homeowner's insurance, and $2,400 for utilities. The home was purchased 5 years ago for $180,000 (excluding the cost of the land) and has been used as a home office every year since purchase. Sydney chooses the actual expense method for computing her home office deduction. What is the amount of her home office deduction for the year? (MACRSNepreciation % is 2.564%) O $1,644 O $5.735 O $1.489 O $2,500 O $1,120
- Classify each of the following cases as "Included in" or "Excluded from" gross income. Included in/Excluded from Gross Income a. Eloise received $150,000 in the settlement of a sex discrimination case against her former employer. b. Nell received $10,000 for damages to her personal reputation. Nell also received $40,000 in punitive damages. c. Orange Corporation, an accrual-basis taxpayer, received $50,000 from a lawsuit it filed against its auditor, who overcharged for services rendered in a previous year. d. Beth received $10,000 in compensatory damages in a lawsuit she filed against a tanning parlor for severe burns she received from using the parlor's tanning equipment. Beth also received $30,000 in punitive damages in the lawsuit against the tanning parlor. e. Joanne received compensatory damages of $75,000 from a cosmetic surgeon who botched her nose job. Joanne also received $300,000 in punitive damages from the cosmetic surgeon who…Adam Fleeman, a skilled carpenter, started a home improvement business with Tom Collins, a master plumber. Adam and Tom are concerned about the payroll taxes they will have to pay. Assume they form an S corporation and each earns a salary of $106,000 from the corporation; in addition, they expect their share of business profits to be $88,500 each. How much Social Security tax and Medicare tax (or self-employment tax) will Adam, Tom, and their corporation have to pay on their salary and profits? (Assume Adam and Tom are paying themselves reasonable salaries.) Adam Tom S corporation FICA TaxPoly received a TV set from her employer Alfa Mart Company, a business entity engaged in the distribution of home appliances, in exchange for payment of her two-month salary amounting to Php. 50,000.00. The merchandise, with a prevailing market price of Php. 55,000, cost the company Php. 25,000.00. Determine Poly's taxable compensation income.
