South-Western Federal Taxation 2019: Individual Income Taxes (Intuit ProConnect Tax Online 2017 & RIA Checkpoint 1 term (6 months) Printed Access Card)
42nd Edition
ISBN: 9781337702546
Author: James C. Young, William H. Hoffman, William A. Raabe, David M. Maloney, Annette Nellen
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 1, Problem 19DQ
To determine
Identify whether Person J is under misconception regarding the operation of Federal gift tax and estate tax. Explain.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Meghan gives May (not Meghan’s spouse) a gift of $34,000 (plus 4905) in 2021. Meghan is married and has one child. May is married, but does not have any children. Is this gift taxable and why? If so, to whom is it taxable and what amount is taxed? If there is a tax, how can the tax be avoided in this circumstance?
Which of the following would constitute tax evasion?
a.
Henry salary sacrifices future income for which services have not already been provided into superannuation.
b.
Emily defers prepayments of income to a later income year.
c.
Jane does not include $50 of interest from her bank account on her tax return.
d.
Jia establishes a family trust and distributes income between family members equally.
For the following tax return problem, assume the taxpayer does not wish to contribute to the Presidential Election Fund. In addition, the taxpayer did not sell, receive, exchange or otherwise acquire any financial interest in any virtual currency during the year. If the taxpayers are entitled to the child tax credit, assume they did not receive the advance child tax credit payment for 2021. They will claim the entire tax credit.
Maribel Gomez is a single taxpayer, SS# 412-34-5670, living at 5037 Circle Court, Crestview, IL 60543. Maribel is a supervisor whose 2021 shows gross wages of $94,850 and $14,500 of federal withheld. There was social security withholding of $5,881 and Medicare withholding of $1,375 and a state withholding of #2,595. Maribel did not itemize and had the following stock transactions for 2021.
Stock Shares Date Purchased Date Sold Sale Price Cost Basis
5,500 7/8/2020 9/12/2021…
Chapter 1 Solutions
South-Western Federal Taxation 2019: Individual Income Taxes (Intuit ProConnect Tax Online 2017 & RIA Checkpoint 1 term (6 months) Printed Access Card)
Ch. 1 - Prob. 1DQCh. 1 - Prob. 2DQCh. 1 - The Sixteenth Amendment to the U.S. Constitution...Ch. 1 - Prob. 4DQCh. 1 - How does the pay-as-you-go procedure apply to wage...Ch. 1 - Jane, a tax practitioner, has reviewed the law on...Ch. 1 - Prob. 7DQCh. 1 - Prob. 8DQCh. 1 - Prob. 9DQCh. 1 - Prob. 10DQ
Ch. 1 - Sophia lives several blocks from her parents in...Ch. 1 - Prob. 12DQCh. 1 - Prob. 13DQCh. 1 - Prob. 14DQCh. 1 - Prob. 15DQCh. 1 - Prob. 16DQCh. 1 - Prob. 17DQCh. 1 - Prob. 18DQCh. 1 - Prob. 19DQCh. 1 - Prob. 20DQCh. 1 - Prob. 21DQCh. 1 - What is the difference between the Federal income...Ch. 1 - As to those states that impose an income tax,...Ch. 1 - Prob. 24DQCh. 1 - Prob. 25DQCh. 1 - Prob. 26DQCh. 1 - Prob. 27DQCh. 1 - Prob. 28DQCh. 1 - Contrast FICA and FUTA as to the following: a....Ch. 1 - Prob. 30DQCh. 1 - Prob. 31DQCh. 1 - Prob. 32DQCh. 1 - Prob. 33DQCh. 1 - Prob. 34DQCh. 1 - Serena operates a gift shop. To reduce costs of...Ch. 1 - Prob. 36DQCh. 1 - Prob. 37DQCh. 1 - Prob. 38DQCh. 1 - Prob. 39DQCh. 1 - Prob. 40DQCh. 1 - Prob. 41DQCh. 1 - Prob. 42DQCh. 1 - Prob. 43DQCh. 1 - Prob. 44DQCh. 1 - Prob. 45DQCh. 1 - Prob. 46DQCh. 1 - Prob. 47DQCh. 1 - Prob. 48DQCh. 1 - Prob. 49DQCh. 1 - Prob. 50DQCh. 1 - Using information from this chapter as well as...Ch. 1 - Prob. 3RP
Knowledge Booster
Similar questions
- Bob wants to give $15,000 to his friend and wants to use the annual exclusion to avoid gift tax. Which of the following is not a requirement? The gift cannot exceed $15,000 It must be a gift of a present interest. His wife must consent to the gift It must be completed gift this year.arrow_forwardJohn is the owner of an annuity that is in the accumulation phase. Jean is named as beneficiary. If John dies, the value of the annuity will A) be taxed to John's estate as a capital gain B) be kept by the company that issued the contract C) be paid to Jean D) not be included in his gross estatearrow_forwardA client approached you with a question about the tax consequences of setting up an irrevocable trust for his two grandchildren to attend college. Please respond to the following: Discuss the tax issues or consequences of the generation-skipping provision and a direct gift to the grandchildren instead of creating the trust. Make at least two recommendations to support either a direct gift to the grandchildren or the creation of the trust.arrow_forward
- Henry's oldest son has few financial resources. Henry would like to contribute annually to a trust, with his son only receiving the trust income. The remainder of the trust would go to his grandchildren (his son's children) at his son's death. Henry wants his son to receive all the earnings from the trust with no restrictions. He realizes that his son will likely squander trust income he receives but wants to otherwise protect his son from his creditors. Which of the following trusts would you recommend that Henry establish for the benefit of his son? A) A support trust B) An irrevocable trust, including spendthrift provisions C) A Section 2503(b) trustarrow_forward2. Six years ago, Alvin loaned his prospective brother-in-law, Bruno, $20,000. The money was used to help Bruno pay for the wedding to Alvin's sister Kitty. Shortly after the wedding, it was discovered that Bruno was already married to someone else. Before Bruno could be indicted for bigamy, he disappeared and has not been heard from since. In the current year, Alvin dies still holding onto Bruno's note. For tax purposes, what do you suggest as to the handling of Bruno's note?arrow_forwardAsshish is a medical doctor and a scientist. He works at a local hospital in the mornings, attending to patients. At lunchtime he takes a train to the local university where he works in a research laboratory. At the end of the day, he takes the train home. Advise Asshish as to the tax deductibility of the train fares. O The train fare from the university to his home will not be deductible as it is a private or domestic expense O The train fare from the university to his home will be deductible as it is necessary to put him in a position to earn the income O The train fare from the university to his home will not be deductible as it is a fringe benefit tax O The train fare from the university to his home will be deductible as it is directly connected to his income exertionarrow_forward
- Doug and Tammy are not related and do not live together. Doug is employed and earns commission income. Tammy is an independent broker and earns commission income. Both maintain an office in their homes. Which of the following statements is false regarding the tax treatment of their incomes for 2020? (a) Tammy can incur a non-capital loss, but Doug cannot. (b) Tammy and Doug can deduct a portion of their property tax and house insurance (c) Tammy can deduct a portion of her home mortgage interest, but Doug cannot. (d) Tammy and Doug can claim CCA on their computers.arrow_forwardChristian wants to transfer as much as possible to his 4 adult married children (including spouses) and 13 minor grandchildren without using any unified transfer tax credit. a. What amount should Christian transfer to accomplish his tax goal without using any unified transfer tax credit? b. What if Christian's spouse, Mia, joins in the gifts? They can gift $__--- without using any unified transfer tax credit. c. Express your computations for parts (a) and (b) as a Microsoft Excel formula.arrow_forwardA wealthy couple comes to you asking for advise about transferring property to their children. The are vaguely aware of wills and gifts but do not know many details. I particular they keep asking you "why can't we just avoid the estate tax by giving our kids everything while we are still alive?" Briefly explain to them why they cannot do this. Specifically, address the following: The relationship of gifts to estates How much gift can be given subject to an exclusions Other taxes that apply to gifts either explicitly or implicitly.arrow_forward
- 45. Michelle lives in a state that allows use of a beneficiary deed to transfer property at death. She owns her home in her sole name. She wants this asset to go to Bertram, her only child, at her death. Which one of the following is a correct statement regarding use of a beneficiary deed in this situation? A) A beneficiary deed can only transfer personal property at death. B) She will incur gift tax if she records the deed. C) If she uses a beneficiary deed, she will not be able to live in the house until her death. D) If Bertram predeceases her, Michelle will be able to name another beneficiary to receive title to the home at her death.arrow_forwardRosina can withdraw from her Registered Retirement Savings Plan (RRSP) with no tax impact but if she withdraws from her Tax-Free Savings Account (TFSA) she must include the amount on her tax return and pay taxes on it unless she uses the funds under the following two plans: Home Buyers Plan and Lifelong Learning Plan. A True Falsearrow_forwardReview the following scenario. Use the information provided to answer questions about the taxpayer’s 2020 return.Evonne Williams (32) is filing as a single taxpayer. Evonne was the beneficiary of one of her great-grandmother’s traditional IRAs. She passed away during the year, and Evonne took a $2,000 total distribution from the IRA. She then used the money to pay down her credit card debt.Evonne did not qualify for any COVID-19 related exceptions for IRA distributions. As far as she knows, all of her great-grandmother’s contributions to the account were deductible.Evonne’s only other income during the year was $44,000 in wages. She will claim the standard deduction. Question 1. Evonne received the following Form 1099-R reporting the IRA distribution. The form shows a code "4" in box 7, indicating that the distribution is due to death. When Evonne files her 2020 return, how much of the distribution must she include in her total income? $0 $200 $1,800 $2,000arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT
Individual Income Taxes
Accounting
ISBN:9780357109731
Author:Hoffman
Publisher:CENGAGE LEARNING - CONSIGNMENT