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?
Richard has the following potential liabilities: William, a former employee, has sued Richard for $880,000. Richard contacted his attorney, and the case is believed to be frivolous. Carter sued Richard for an undisclosed amount for a class action lawsuit. Richard thinks it's frivolous, but his attorneys indicate a loss is probable for $88,000. Charles sued Richard because he slipped outside of Richard's store. The claim is $264,000 and Richard is certain he will lose the case but believes Charles will settle. The attorneys agree and based on conversations with Charles's attorneys, have stated that it is remote the claim will be settled for $255,200. Charles's attorneys indicated he would be willing to accept either cash of $242,000 or shares of Richard's closely-held common stock currently valued at $233,200. Richard would prefer not to settle in cash. Richard is suing William for $264,000 because William is in violation of a non-compete agreement he has with Richard. Richard is…
Landlord leased her suburban ice cream parlor for three years at a rent of $2000 a month toBaskin. Six months later, Baskin transferred his interest in the lease to Herrell. One year later,Herrell transferred his interest in the lease to Ana. Now, none of the parties is paying the rent.Landlord wants to sue Herrell for the rent, "because he is the only one who can probably paythe rent that is due." In order to sue Herrell for the remaining rent, Landlady will have to prove:a-That the transfers from Baskin to Herrell, and from Herrell to Ana, both conveyed the fullremaining interest in the leasehold. b-That the transfer from Baskin to Herrell conveyed the full remaining interest in the lease leasehold, but the transfer from Herrell to Ana conveyed less than the full remaining interest in thec-That the transfer from Baskin to Herrell conveyed less than the full remaining interest in the leasehold, but the transfer from Herrell to Ana conveyed the full remaining interest in the lease. d-…
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 $
Brian owns a duplex used as rental property. The duplex has a basis of $84,000 and $380,000 FMV. He transfers the duplex to Carrie,his sister, in exchange for a triplex that she owns. The triplex has a basis of $280,000 and a $380,000 FMV. Two months after the exchange, Carrie sells the duplex to a business associate for $395,000. Requirements Determine: a. Brian's realized and recognized gain on the exchange. b. Carrie's realized and recognized gain on the exchange. Requirement a. Determine Brian's realized and recognized gain on the exchange. Begin with the realized gain. First identify the formula, then enter the applicable amounts and calculate the realized gain. Amount realized (Brian) - Adjusted basis (duplex) = Realized gain $380,000 - $84,000 = $296,000 Determine Brian's recognized gain on the exchange. The recognized gain is $ .
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
Sean sells land to Eli, his brother, for the fair market value of $39,000. Six months later when the land is worth $45,000, Eli sells the property to his son, Jon, without gift tax. His son sells the land for $47,000. Sean’s adjusted basis for the land is $24,000 what is Jon’s recognized gain or loss on the sales?
Hunter has a $60,000 loss from an investment in a partnership in which he does not participate. His basis in the interest is $45,000. a.How much of the loss is disallowed by the at-risk rules? b. How much of the loss is disallowed by the passive loss rules?
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
Sam and Sung are equal joint owners in a property which they rent out. Because Sam is unemployed, he spends more time at the property to help do maintenance and gardening. Because Sung earns $200,000 per year from his job as an accountant, they come to a private agreement to divide the annual rent of received from their tenants, as follows: Sam will receive a salary payment of $20,000, after which the remainder will be split 60% in favour of Sam and 40% in favour of SungDuring the 2020 tax year, they incurred the following expenses on the property which they hope to claim as deductions: Council rates: $3,000Land Tax: $12,000Bank interest on the loan taken out to finance the purchase of the property: $80,000Required: If the total rent received for the 2020 tax year was $177979 calculate Sam's Assessable Income (assuming he has no other income sources).