CONCEPTS IN FED.TAX.,2020-W/ACCESS
20th Edition
ISBN: 9780357110362
Author: Murphy
Publisher: CENGAGE L
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Chapter 2, Problem 45P
To determine
Explain in terms of the income tax concepts whether Person S have any income from the receipt of the advance.
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Samantha works for IBM and is entitled to receive a monthly salary of $5,000. Samantha enters into a child-support agreement with her ex-husband whereby Samantha agrees topay $2,000 per month for all of 2021. In fact, Samantha informs IBM of the arrangement and has the $2,000 deposited directly into her ex’s bank account. When Samantha files her tax return, the IRS claims Samantha is taxed on the $24,000 she paid in child support. Samantha claims her ex should be taxed. Who is right?
Determine whether the taxpayer in each of the following situations is in constructive receipt of income. If not, explain when the income will be constructively received.
Regan is an employee of BIF Manufacturing, earning $3,000 per month. She purchases merchandise from BIF costing $2,000 in January of the current year. To pay for the merchandise, BIF agrees to deduct $75 per month from her pay, reducing it to $2,925 per month before other withholdings.
Answer: see the attached file.
My question:
I don't understand why $75 is the constructive receipt of income. Regan is not receiving anything and it is not available to him. Also, why would Regan include $3,000 include in gross income? isn't it 3000-75?
Song earns $150,000 taxable income as an interior designer and is taxed at an average rate of 20 percent (i.e., $30,000 of tax).
Answer the questions below assuming that Congress increases the income tax rate such that Song's average tax rate increases from
20 percent to 25 percent.
Required:
a. What will happen to the government's tax revenues if Song chooses to spend more time pursuing her other passions besides work
in response to the tax rate change and therefore earns only $112,500 in taxable income?
b. What is the term that describes this type of reaction to a tax rate increase?
c. What types of taxpayers are likely to respond in this manner?
Complete this question by entering your answers in the tabs below.
Required A Required B Required C
What types of taxpayers are likely to respond in this manner?
Type of taxpayers
Taxpayers with less disposable income
Taxpayers with more disposable income
d C
Chapter 2 Solutions
CONCEPTS IN FED.TAX.,2020-W/ACCESS
Ch. 2 - Prob. 1DQCh. 2 - Prob. 2DQCh. 2 - What is an arms-length transaction? What is its...Ch. 2 - Prob. 4DQCh. 2 - Prob. 5DQCh. 2 - Prob. 6DQCh. 2 - Prob. 7DQCh. 2 - Prob. 8DQCh. 2 - Prob. 9DQCh. 2 - Prob. 10DQ
Ch. 2 - Prob. 11DQCh. 2 - Prob. 12DQCh. 2 - Prob. 13DQCh. 2 - Prob. 14DQCh. 2 - Prob. 15DQCh. 2 - Prob. 16DQCh. 2 - Prob. 17DQCh. 2 - Prob. 18PCh. 2 - Prob. 19PCh. 2 - Sheila, a single taxpayer, is a retired computer...Ch. 2 - Prob. 21PCh. 2 - Prob. 22PCh. 2 - Prob. 23PCh. 2 - Prob. 24PCh. 2 - Prob. 25PCh. 2 - Prob. 26PCh. 2 - Prob. 27PCh. 2 - Prob. 28PCh. 2 - Prob. 29PCh. 2 - Prob. 30PCh. 2 - Prob. 31PCh. 2 - Prob. 32PCh. 2 - Prob. 33PCh. 2 - Prob. 34PCh. 2 - Prob. 35PCh. 2 - Prob. 36PCh. 2 - Prob. 37PCh. 2 - Prob. 38PCh. 2 - Prob. 39PCh. 2 - Prob. 40PCh. 2 - Chelsea, who is single, purchases land for...Ch. 2 - Prob. 42PCh. 2 - Prob. 43PCh. 2 - Prob. 44PCh. 2 - Prob. 45PCh. 2 - Prob. 46PCh. 2 - Prob. 47PCh. 2 - Prob. 48PCh. 2 - Prob. 49PCh. 2 - Prob. 50PCh. 2 - Prob. 51PCh. 2 - Prob. 52PCh. 2 - Prob. 53PCh. 2 - Prob. 54PCh. 2 - Prob. 55PCh. 2 - Prob. 56PCh. 2 - Prob. 57PCh. 2 - Prob. 58PCh. 2 - Prob. 59PCh. 2 - Prob. 60PCh. 2 - Determine the taxpayers adjusted basis in each of...Ch. 2 - Prob. 62PCh. 2 - Prob. 63IIPCh. 2 - Prob. 64IIPCh. 2 - Prob. 65IIPCh. 2 - Jerry and his wife, Joanie, own a successful...Ch. 2 - Prob. 67IIPCh. 2 - Prob. 68IIPCh. 2 - Prob. 69IIPCh. 2 - Prob. 70IIPCh. 2 - Prob. 71IIPCh. 2 - Prob. 79DCCh. 2 - Prob. 80DCCh. 2 - Prob. 81TPC
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