Chapter 1, Problem 12DQ

Makiko Iwanami, a student from Osaka, Japan, is in one of your classes. She is considering the purchase of a used car and has been told that she must buy automobile insurance to register the car and obtain license plates. Makiko has come to you for advice, and you have decided to focus on three aspects of automobile insurance. 1. Explain how liability insurance works in the United States. Advise Makiko about which liability insurance limits she should select. 2. Makiko is especially impressed that automobile insurance includes medical payments coverage because she has no health insurance. Explain why the medical payments coverage does not actually solve her health insurance problem, and describe the type of coverage it provides. 3. Makiko plans to pay cash for the car and doesn't want to spend more than $5000. Outline the coverage provided by collision insurance and factors that might make such coverage optional for Makiko

You are trying to decide if you are going to drive or fly to San Diego, California for your upcoming vacation. Which of the following is irrelevant when deciding whether to drive or fly to San Diego?     Cost of plane ticket.     Cost of car insurance.     Wear and tear on your vehicle.     Cost of the gasoline.

Can the Taxpayer claim the following dependent(s)? Why or why not?   (Situation 1) Fiona’s niece is sixteen and has come to the U.S. from Ireland because her parents were in violent trouble. She moved in with Fiona in March and lived there throughout the year. Fiona paid for all of her expenses. Can Fiona claim her as a dependent? What if the niece’s friend stayed with Fiona too?   (Situation 2) Same as above, but Fiona received checks intermittently from her sister. Those checks totaled 17K through the year. What should Fiona do to make sure she can claim Niece as a dependent?

If Kevin works off the clock, then he will sacrifice family time and responsibilities. This is an example of what type of ethical reasoning?

Jamie has an undergraduate degree in finance and is employed full-time by a bank. She is taking courses at a local university leading to an MBA degree. Is the full cost of this education deductible to her? If so, what limitations are imposed on the deduction?

A Personal Liability Umbrella isn't required for most people, but certainly can be valuable. At what point would it be necessary to purchase a Personal Liability Umbrella policy? After purchasing your first car or house or boat or is it ever needed? Share some points of view.

Joey lives in North Carolina, a common law state. He is a shareholder in an S corporation. If he marries a nonresident alien, will the S election terminate? Would your answer change if he lived in Louisiana? Explain.

In his Ponzi scheme, what did Abraham Kennard use to lure his victims? Group of answer choices A. Loans to corporations headed by African Americans B. Investment opportunities for black investment bankers C. Promise of grants to black preachers D. Insurance coverage for members of black churches

Mr. Chuang set up a company called Good Home Limited. The company holds several properties in Hong Kong and lease out to earn rental income. Mr. Chuang wonders whether the company should pay property tax or profits tax. He also concerns if double taxation of the same income derived from a property under property tax and profits tax will charge to Good Home Limited and how it can avoid this if so. Advise Mr. Chuang