Mike and Jeff still run a law practice in French Polynesia as a general partnership with each partner owning 50%. Mike commits an act of malpráctice in a divorce that he is handling. The client suffers $90,000 in damages. She wishes to sue Mike. What liability does Jeff have to the client? Jeff has no liability to the client Jeff must pay $45,000 Jeff must pay the entire $90,000 Jeff's liability is joint and several with Mike's liability.

Mike and Jeff still run a law practice in French Polynesia as a general partnership with each partner owning 50%. Mike commits an act of malpráctice in a divorce that he is handling. The client suffers $90,000 in damages. She wishes to sue Mike. What liability does Jeff have to the client? Jeff has no liability to the client Jeff must pay $45,000 Jeff must pay the entire $90,000 Jeff's liability is joint and several with Mike's liability.

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter3: Income Sources

Section: Chapter Questions

Problem 56P

See similar textbooks

Similar questions

Bonnie is married and has one child. She owns Bonnies Rib Joint, which produces a taxable income of approximately 120,000 per year. a. Assume that Bonnies taxable income is 40,000 without considering the income from the rib joint. How much tax will she pay on the 120,000 of income from the rib joint? b. You work for the firm that prepares Bonnies tax return. Bonnie has asked the partner for whom you work to advise her on how she might lower her taxes. The partner has assigned you this task. Draft a memorandum to the partner that contains at least two options Bonnie could use to lower her taxes. For each option, explain the calculations that support the tax savings from your recommendation.
Bill and Jane Jones were divorced on January 1, 2018. They have no children. In accordance with the divorce decree, Bill transferred the title of their house over to Jane. The home had a fair market value of 250,000 and was subject to a 100,000 mortgage. Under the divorce agreement, Bill is to make 1,000 monthly mortgage payments on the home for the remainder of the mortgage. In the current year, Bill made 12 mortgage payments. What amount is taxable to Jane in the current year? a. 12,000 b. 250,000 c. 100,000 d. 0
As a result of their divorce, Eric agreed to pay alimony to Tammy of $20,000 per year. The payments are to cease in the event of Fric's or Tammy's death or in the event of Tammy's remarriage. The alimony is not tied to their daughter with any conditions. In addition, Tammy is to receive their residence, which cost them $100,000 but is worth $140,000. a) How will the $20,000 payments be treated by Eric and Tammy if the divorce was finalized in 2018? b) How will the $ 20,000 payments be treated by Eric and Tammy if the divorce was finalized in 2019? c) Assume the alimony was tied to a condition surrounding their daughter. This condition states that once their daughter turns 18, the payments to Tammy drop by $12,000 per year. If all other conditions surrounding the payments remain true, how would the payments be treated assuming their divorce was finalized in 2018? In 2019?
Grace is an officer of a local bank that merges with a national bank, resulting in a change of ownership. She loses her job as a result of the merger, but she receives a cash settlement of $590,000 from her employer under her golden parachute. Her average annual compensation for the past five tax years was $200,000. If an amount is zero, enter "0". a. What are the tax consequences to Grace and the bank of the $590,000 payment? The $590,000 payment - considered a golden parachute payment. Therefore, the bank is allowed a deduction of $ Grace has taxable income of $ and is liable for an excise tax of $ b. Assume instead that Grace's five-year average annual compensation was $110,000 and that she receives $390,000 in the settlement. What are the tax consequences to Grace and the bank? The $390,000 payment considered a golden parachute payment. Therefore, the bank is allowed a deduction of Grace has taxable income of $ and is liable for an excise tax of $
Jerry and Elizabeth divorced in 2018 and do not live together. Elizabeth has custody of their child, Art, and Jerry pays Elizabeth $22,000 per year. All property was divided equally. How much should Elizabeth include in income if $12,000 of Jerry’s payments is designated as “nonalimony” in the divorce decree?
Mrs. S borrowed P20,000.00 from PG. She and her 19-year-old son, Mario, signed the promissory note for the loan, which note did not say anything about the capacity of the signers. Mrs. S made partial payments little by little. After several years, she died leaving a balance of P10,000.00 on the note. PG demanded payment from Mario who refused to pay. When sued for the amount, Mario raised the defense that when he signed the note he was still a minor. Should the defense be sustained? Why?
Steve and Stephanie Pratt purchased a home in Spokane, Washington, for $400,000. They moved into the home on February 1 of year 1. They lived in the home as their primary residence until November 1 of year 1, when they sold the home for $500,000. The Pratts' marginal ordinary tax rate is 35 percent. (Leave no answer blank. Enter zero if applicable.) b. Assume the Pratts sell the home because Stephanie's employer transfers her to an office in Utah. How much gain will the Pratts recognize on their home sale? Recognized gain
Martha, an accrual method taxpayer, has an accounting practice. In 2020, she performs tax analyses for Arnold and sends him an invoice for $10,000. In 2021, Martha sells her practice and all accounts to David. Arnold's debt becomes worthless that year after David has purchased the practice. The result is a. Martha deducts a nonbusiness bad debt in 2021. b. Martha deducts a business bad debt in 2021. c. David deducts a business bad debt in 2021. d. David deducts a nonbusiness bad debt in 2021.
Quince owns a used-car lot where Ray works as a salesperson. Quince tells Ray not to make any warranties for the cars. To make a sale to Sylvia, however, Ray adds a 50,000-mile warranty. Later, Sylvia sues Quince for breach of warranty. Quince may hold Ray liable for any damages he must pay to Sylvia under which remedy: a. indemnification b. avoidance c. constructive trust d. accounting
Just prior to a major medical procedure, Cody gives his son, Liam, stock in Robin corporation (fair market value of $1,254,600 and basis of $1,756,440) at the time of the gift, Cody held some unused capital losses. The surgery was unsuccessful, and after Cody's death, Liam sells the stock for $1,932,084 A. What is the income tax result for Liam? B. What if the gift had not been made and the stock passes to Liam as a bequest from Cody?
Just prior to a major medical procedure, Cody gives his son, Liam, stock in Robin Corporation (fair market value of $1,624,200 and basis of $2,273,880). At the time of the gift, Cody held some unused capital losses. The surgery is unsuccessful, and after Cody's death, Liam sells the stock for $2,501,268. Question Content Area a. What is the income tax result for Liam? $fill in the blank c46f48f55fc1018_1 Question Content Area b. What if the gift had not been made and the stock passed to Liam as a bequest from Cody?
Juan and Maria, who have two young children, are in the process of obtaining a divorce. Juan expects to have $250,000 of income each year while Maria expects to have $180,000 of income each year. Assume the children will live with Maria after the divorce and that Juan will pay child support. What advice can you provide them regarding the child credit? A. The child credit is phased out for single taxpayers with AGI above $400,000. Juan will be entitled to the child credit because his income is below the threshold. The credit is only available to taxpayers who claim the children as dependents, so it would be beneficial to allow Juan to claim the children. The tax savings received by Juan should be considered when the amount of child support that Juan must pay is being determined. B. Juan's AGI exceeds $200,000, but Maria's AGI does not. The child credit thus would be reduced if Juan claims it, but there would be no reduction if Maria claims it. Overall,…