CONCEPTS IN FED.TAX.,2020-W/ACCESS
20th Edition
ISBN: 9780357110362
Author: Murphy
Publisher: CENGAGE L
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Chapter 4, Problem 21P
To determine
Discuss whether the receipt of $200 by some of the employees of Company I is taxable as compensation or excluded as a gift.
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Ivy Gordon's home in Charleston was recently gutted in a fire. Her living and dining rooms were destroyed completely, and the damaged personal property had a replacement price of $36,000. The average age of the damaged personal property was 5 years, and its useful life was estimated to be 13 years. What is the maximum amount the insurance company would pay Ivy, assuming that it reimburses losses on an actual cash-value basis and has a $500 deductible? Assume that the total coverage requirement is met. Do not round intermediate calculations. Round the answer to the nearest cent.
LO.2Leonard’s home was damaged by a fire. He also had to be absent from work for several days to make his home habitable. Leonard’s employer paid Leonard his regular salary, $2,500, while he was absent from work. In Leonard’s pay envelope was the following note from the employer: To help you in your time of need. Leonard’s fellow employees also took up a collection and gave him $900. Leonard spent over $4,000 repairing the fire damage.
Based on the above information, how much is Leonard required to include in his gross income?
Question 5 (Chapter 7)
Connor's house burns down in a wildfire. The wildfire was a federally-declared disaster. The fire
destroyed one personal-use computer and damaged another personal-use computer. The
destroyed computer was worth $18,000 at the time of the fire (Connor originally paid S25,000
for it). The damaged computer was worth $3,000 at the time of the fire and $2,000 after the fire
(Connor originally paid S6,000 for it). Connor receives $12,000 in insurance proceeds for the
destroyed computer and $500 in insurance proceeds for the damaged computer. Connor’s AGI is
S50,000.
Fair
Fair
Amount of
Adjusted
Market
Market
Insurance
Asset
Value
Before
Casualty Loss
(before adjustment)
Basis
Value
Recovery
After
Destroyed
Computer
Damaged
Computer
Total
Deductible
Casualty
Loss
Chapter 4 Solutions
CONCEPTS IN FED.TAX.,2020-W/ACCESS
Ch. 4 - Prob. 1DQCh. 4 - Prob. 2DQCh. 4 - Prob. 3DQCh. 4 - Prob. 4DQCh. 4 - Prob. 5DQCh. 4 - Prob. 6DQCh. 4 - Prob. 7DQCh. 4 - Prob. 8DQCh. 4 - Prob. 9DQCh. 4 - Prob. 10DQ
Ch. 4 - Prob. 11DQCh. 4 - Prob. 12DQCh. 4 - Prob. 13DQCh. 4 - Prob. 14DQCh. 4 - Prob. 15DQCh. 4 - Prob. 16DQCh. 4 - Prob. 17DQCh. 4 - Prob. 18DQCh. 4 - Prob. 19DQCh. 4 - Prob. 20PCh. 4 - Prob. 21PCh. 4 - Prob. 22PCh. 4 - Prob. 23PCh. 4 - LO2 Herman inherits stock with a fair market value...Ch. 4 - LO2 Fatima inherits a rental property with a fair...Ch. 4 - Prob. 26PCh. 4 - Prob. 27PCh. 4 - Prob. 28PCh. 4 - Prob. 29PCh. 4 - Prob. 30PCh. 4 - Prob. 31PCh. 4 - Prob. 32PCh. 4 - Prob. 33PCh. 4 - Prob. 34PCh. 4 - Prob. 35PCh. 4 - Prob. 36PCh. 4 - Prob. 37PCh. 4 - Prob. 38PCh. 4 - Prob. 39PCh. 4 - Prob. 40PCh. 4 - Prob. 41PCh. 4 - Tia is married and is employed by Carrera Auto...Ch. 4 - Prob. 43PCh. 4 - Prob. 44PCh. 4 - Prob. 45PCh. 4 - Prob. 46PCh. 4 - Prob. 47PCh. 4 - Prob. 48PCh. 4 - Prob. 49PCh. 4 - Prob. 50PCh. 4 - Prob. 51PCh. 4 - Prob. 52PCh. 4 - Prob. 53PCh. 4 - Prob. 54PCh. 4 - Prob. 55PCh. 4 - Prob. 56PCh. 4 - Prob. 57PCh. 4 - Prob. 58PCh. 4 - Prob. 59PCh. 4 - Prob. 60PCh. 4 - Prob. 61PCh. 4 - Prob. 62PCh. 4 - Prob. 63PCh. 4 - Prob. 64PCh. 4 - Prob. 65IIPCh. 4 - Prob. 66IIPCh. 4 - Prob. 67IIPCh. 4 - In each of the following problems, identify the...Ch. 4 - In each of the following problems, identify the...Ch. 4 - In each of the following problems, identify the...Ch. 4 - Prob. 71IIPCh. 4 - Prob. 72IIPCh. 4 - Prob. 73IIPCh. 4 - Prob. 74IIPCh. 4 - Prob. 75IIPCh. 4 - Prob. 76IIPCh. 4 - Prob. 77TACh. 4 - Prob. 80TACh. 4 - Reggie receives a 2-year scholarship to Big...Ch. 4 - Prob. 83IPCh. 4 - Calculate Carmins adjusted gross income on her...Ch. 4 - Prob. 85DCCh. 4 - Marlo and Merlins son, Alex, needs 20,000 to start...Ch. 4 - Prob. 87TPCCh. 4 - Prob. 88TPCCh. 4 - Prob. 89EDC
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- Virginia has business property that is stolen and partially destroyed by the time it was recovered. She receives an insurance reimbursement of $6,000 on property that had a $14,000 basis and a decrease in market value of $10,000 due to damage caused by the theft. What is the amount of Virginia's casualty loss? $14,000 $8,000 $10,000 $4,000 None of the abovearrow_forwardIf a homeowner's insurance had a replacement cost policy that covered damage to the home and the home was completely destroyed, what amount would the insurance company cover based on the following: - home depreciated value before the damage was $100,000 - home value to rebuild is $150,000 - home mortgage $120,000 - value of neighbour's home $130,000arrow_forward36. LO.3, 4, 8 Olaf lives in the state of Minnesota. In May 2022, a tornado hit the area and damaged his home and automobile. Applicable information is as follows: Item Home Auto Adjusted Basis $350,000 60,000 FMV before $500,000 40,000 FMV after $100,000 10,000 Insurance Proceeds $280,000 20,000 Because of the extensive damage caused by the tornado, the President designated the area a Federal disaster area. Olaf and his wife, Anna, always file a joint return. Their 2021 tax return shows AGI of $180,000 and taxable income of $145,000. In 2022, their return shows AGI of $300,000 and taxable income (exclusive of the casualty loss deduction) of $245,000. Determine the amount of Olaf and Anna's loss and the year in which they should take the loss.arrow_forward
- An earthquake does $5,000 in damage to a property covered under a dwelling policy. In addition to the initial earthquake damage, the tremors cause a gas main explosion, causing an additional $2,500 in damage to the insured property. How much will the insurer pay? AO Nothing BO $2,500 CO $5,000 DO $7,500arrow_forwardCarolina's house burned and she lost household items worth a total of $50,000. House insured for $160,000, homeowner's policy coverage personal belongings up to 55% of insured value of the house.Calculate how much insursance coverage policy provides personal belongings and will she recieve payment for belongings?arrow_forwardH6. John suffered a cardiac event while at a ski resort in Utah and was airlifted to a hospital in Salt Lake City. John's family neglected to discuss the air transport with his insurance carrier before the airlift. John survived the airlift but is not sure he’ll survive the bill from the air transport. Considering his deductible and co-pay, John's out-of- pocket cost is $711,021. John’s credit union has agreed to a 15-year loan at 6% compounded monthly (or 6%/12 = 0.5% per month). What is John’s monthly payment on the loan assuming end-of-month payments?arrow_forward
- You carry 25/50/25 coverage on your automobile. You are involved in an accident in which you are eventually held responsible for the following damages: other driver, $25,000; passenger 1, $20,000; passenger 2, $9,000; other car, $11,000. How much is left for you to pay after your insurance company has met its obligations under your policy? 0 bodily injury; 0 property damage 0 bodily injury; $4,000 property damage $4,000 bodily injury; 0 property damage $9,000 bodily injury; $4,000 property damagearrow_forwardLO.3, 8 Several years ago Benny Jackson (125 Hill Street, Charleston, WV 25311) acquired an apartment building that currently generates a loss of 60,000. Bennys AGI is 130,000 before considering the loss. The apartment building is in an exclusive part of the city, and Benny is an active participant. Write a letter to Benny explaining what effect the loss will have on his AGI.arrow_forward63 Your insured lives in an apartment but takes a temporary position in another city and must store some me for fur fure items in a storage ware apartment is sublet to a friend. Subsequently, the warehouse is broken into and some of your Insured's furniture is stolen. What Would a Tenant OA) The actual cash value or replacement cost of the property stolen less the policy deductible, subject to the 10% limitation on property temporanlite OB Nothing. The loss is not covered. OC The actual cash value or replacement cost of all the personal property stolen, less the policy deductble, subject to the polis Ilimit OD That proportion of the loss which the value of the property at the warehouse bears to the total value of all of his her personal propertyarrow_forward
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