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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- Last summer, Casey mowed lawns to earn extra money. He was paid $250 in cash, and no deductions were made from his pay. Casey did not re files his tax return, he is required to report this income. True or False? True FalseKimberly is a self-employed taxpayer. She recently spent $3,300 for airfare to travel to Italy. What amount of the airfare is deductible in each of the following alternative scenarios? (Leave no answers blank. Enter zero if applicable.) c. On the trip, she spent seven days on business activities and three day(s) on personal activities. Deductible amountJulie loaned her friend Nathan $2,500. Nathan did not repay the debt and skipped town. Can Julie claim any deduction for this bad debt? In answering this case, use only the Internal Revenue Code for your research.
- To support herself while attending school, Daun Deloch sold stereo systems to other students. During the first year of operations, Daun purchased the stereo systems for $260,000 and sold them for $370,000 cash. She provided her customers with a one-year warranty against defects in parts and labor. Based on industry standards, she estimated that warranty claims would amount to 2 percent of sales. During the year, she paid $4,020 cash to replace a defective tuner. Requireda. Prepare an income statement and statement of cash flows for Daun’s first year of operation. b. Based on the information given, what is Daun’s total warranties liability at the end of the accounting period?Ilene rents her second home. During the year, Ilene reported a net loss of $10,600 from the rental. If Ilene is an active participant in the rental and her AGI is $133,000, how much of the loss can she deduct against ordinary income in the year?Oswald, while walking down the street, is hit by a reckless driver. Oswald sues the driver and recovers the following damages: $20,000 to reimburse Johnny for medical expenses previously incurred (but not previously deducted), $10,000 for pain and suffering, $5,000 for emotional distress stemming from the accident, and $2,500 in punitive damages How much of Oswald's recovery is included in gross income?
- Erika has a mining operation. In 2021, she earned 175 coins with a fair market value (FMV) of $250 per coin at the time she received them. She received 11.25 coins at the same time for transaction verifications. She had no other income from the mining. She sold 120 of the coins for $265 per coin a month later. Her deductible expenses for the mining operation were $12,000. Finally, she earned ten coins for interest with an FMV of $2,300 total. How much net income does Erika show on her Schedule C?On July 15, 2018, H.P. purchases a personal computer for his home. The computer cost $4,000. H.P. uses the computer 60 percent of the time in his business, 15 percent of the time for managing his investments and the remaining 25 percent of the time for various personal uses. Calculate H.P.'s maximum depreciation deduction for 2018 for the computer, assuming he does not make the election to expense or take bonus depreciation.Ricardo's car was damaged in an accident. The cost to repair the car will be $3,240. His deductible is $500. How much will Ricardo's insurance company pay?
- Leilei operates a sole proprietorship, using the accrual basis of tax accounting. Last year, she claimed a $40,125 bad debt deduction for a receivable from Jackie. But this year, Jackie sent her a check for $28,088, which Leilei accepted in full satisfaction of the receivable. How much gross income does Leilei record for the item this year? $fill in the blank 1.During the current year, Harry, a self-employed accountant, travels from Kansas City to Miami for a seven-day business trip. While in Miami, Harry decides to stay for an additional 5 days of vacation. Harry pays $600 for airfare, $200 for meals, and $500 for lodging while on business. The cost of meals and lodging while on vacation was $300 and $500, respectively. How much may Harry deduct as travel expenses for the trip? O $600 O $1,200 O None of the above O $1,100 O $1,300Norris has a deductible of $1,000. He damages his car in a accident and it will cost $3,300 to repair. How much does Norris have to pay? How much does this insurance pay?
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