MCGRAW-HILL'S TAX.OF INDIV.+BUS.2020
20th Edition
ISBN: 9781259969614
Author: SPILKER
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Videos
Question
Chapter 4, Problem 52P
To determine
Determine the tax consequence under the current scenario.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
tim is living with his spouse in California when he finds out that his wife is having an affair. Tim packs his bags and leaves the state to move to Indiana, intending on filing separately. Tim and his spouse cohabitated until June. He earned $50,000 during the year, $30,000 of which was in California. She earned $60,000 during the year. How much wage income does Tim have on his California return and from whom? (Remember, the return is being filed separately)
He has $50,000 in state wages from his pay only, since he's no longer in a community property state.
He has $45,000 in state wages, with $15,000 from half of his state-sourced pay and $30,000 from her half of pay.
He has $55,000 in state wages, with $25,000 from half of his total pay and $30,000 from her half of pay.
He has $30,000 in state wages from his state-sourced pay.
Erica came to Australia from the United States on a working holiday on 1 December
2019 when she finished college. Her parents were separated, and she had been living
between their houses over the last 3 years. All her belongings were packed in a box
and stored in her father's basement when she left for Australia. Over the last 7
months Jane has worked in various jobs in Sydney staying with various friends and
relatives then she went travelling down the east coast of Australia. At the end of
September 2020, she left for New Zealand and intends to go back to the United
States in 2022.
Outline the tax residency consequences for Erica. Explain your answer with
reference to the relevant legislative provisions, case law and the relevant guidance
provided by the ATO.
Jenna, a paid preparer, is preparing a return for her neighbor and close friend, Gerald. Gerald wishes to claim the head of household filing status using his daughter, Sara, as a dependent. Jenna knows that Sara lived with Gerald's ex-wife (Sara's mother) all year. However, when she asked him about this, Gerald replied: "Oh, I understand that you have to ask that. Sara lived with me all year." Then he gave Jenna a knowing wink. Jenna should:
Document her question and Gerald's answer and prepare the return claiming the filing status.
Call Gerald's wife and verify that she will not file a return using the head of household status.
Decline to prepare Gerald's return with the requested filing status. She may not ignore her personal knowledge, no matter what Gerald says.
Obtain a signed statement from Gerald that he agrees to assume the risk of any consequences of the tax position claimed on the return.
Chapter 4 Solutions
MCGRAW-HILL'S TAX.OF INDIV.+BUS.2020
Ch. 4 - How are realized income, gross income, and taxable...Ch. 4 - Prob. 2DQCh. 4 - Prob. 3DQCh. 4 - Why should a taxpayer be interested in the...Ch. 4 - Is it easier to describe what a capital asset is...Ch. 4 - Prob. 6DQCh. 4 - Prob. 7DQCh. 4 - Prob. 8DQCh. 4 - Prob. 9DQCh. 4 - How do taxpayers determine whether they should...
Ch. 4 - Where does the qualified business income (QBI)...Ch. 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. 20DQCh. 4 - How do two taxpayers determine who has priority to...Ch. 4 - Prob. 22DQCh. 4 - Prob. 23DQCh. 4 - Prob. 24DQCh. 4 - Prob. 25DQCh. 4 - For tax purposes, why is the married filing...Ch. 4 - Prob. 27DQCh. 4 - Prob. 28PCh. 4 - David and Lilly Fernandez have determined their...Ch. 4 - Prob. 30PCh. 4 - Prob. 31PCh. 4 - Prob. 32PCh. 4 - Prob. 33PCh. 4 - Prob. 34PCh. 4 - The Samsons are trying to determine whether they...Ch. 4 - Prob. 36PCh. 4 - Francines mother Donna and her father Darren...Ch. 4 - Jamel and Jennifer have been married 30 years and...Ch. 4 - Dean Kastner is 78 years old and lives by himself...Ch. 4 - Prob. 40PCh. 4 - Prob. 41PCh. 4 - Prob. 42PCh. 4 - Prob. 43PCh. 4 - Prob. 44PCh. 4 - Prob. 45PCh. 4 - Elroy, who is single, has taken over the care of...Ch. 4 - Prob. 47PCh. 4 - Prob. 48PCh. 4 - Prob. 49PCh. 4 - Prob. 50PCh. 4 - Prob. 51PCh. 4 - Prob. 52PCh. 4 - Prob. 53PCh. 4 - Marc and Michelle are married and earned salaries...Ch. 4 - Demarco and Janine Jackson have been married for...Ch. 4 - Prob. 56CPCh. 4 - Prob. 57CP
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Eric and Tina have been friends since high school. Tina and her husband would regularly socialise with Eric and his wife. On Eric's birthday, every year Tina would buy him a birthday present worth somewhere between $50 and $100. Eric's full-time job is as an obstetrician at a major public hospital. When Tina was giving birth, coincidentally Eric was the obstetrician on duty. The birth was subject to complications and it was only Eric's high level of competence and medical skill that saved the baby's life. A month later, when Eric's birthday came around, Tina bought him an expensive watch valued at $4,000. With it she gave him a card that read "Thanks for being a great friend and lifesaver". She also gave the two nurses who assisted Eric in delivering her child necklaces worth $800 each. ignoring capital gains tax, discuss whether receipt of the watch constitutes assessable income for Eric.arrow_forwardKiara (31) is married. However, she and her two children, Xavier (3) and Shandra (5), moved back in with her parents in 2019, after she separated from her husband. She will not be filing a joint return with her husband. They are all U.S. citizens and have valid social security numbers. Kiara's divorce had not been finalized by the end of 2020, but her husband did not live with her during the year. The children stayed with him 150 nights and the rest of the nights with Kiara. He did not pay any of her household expenses. Since the separation, Kiara and her children have lived in the finished basement apartment that her parents used to rent to local college students. Kiara pays more than half the cost of maintaining the apartment, and neither of the children provided any of their own support. Kiara’s wages and AGI were $43,250; Xavier’s gross income was $0; Shandra’s was $0. Kiara had no other income including foreign income. Kiara will not be releasing any dependent exemptions she may…arrow_forwardIngrid (43) and Daniel (48) are married but have lived apart since March 15, 2020. They have no divorce decree or separate maintenance agreement. They are both U.S. citizens and have valid social security numbers. Ingrid will not file a joint return with Daniel. Ethan (16), their son, went with Ingrid when she moved out and has lived with her since. Ingrid paid all the household expenses after they moved out. She did sign Form 8332, Release/Revocation of Claim to Exemption for Child by Custodial Parent so Daniel could claim Ethan. Together, Ingrid and Daniel provided more than 50% of Ethan's support. Ethan provided 5% of his own support. Daniel's wages were $27,000; Ingrid's were $29,850; Ethan's gross income was $1,525. Ingrid had no foreign income or investment income. 1.What is Ingrid's correct and most favorable 2020 filing status? Single. Married filing jointly. Married filing separately. Head of household. Qualifying widow(er). 2.Is Ingrid eligible to claim the Child Tax Credit…arrow_forward
- Upon George Welch’s death, he was survived by his third wife, Dorothy Welch, and his daughter by his first marriage, Patricia Fisher. At the time George and Dorothy were married, George was in very poor health and he relied on Dorothy to care for him. George was suicidal and an alcoholic and suffered from severe depression. During the eight months George and Dorothy were married, George became isolated from his family and his health deteriorated. Prior to his death, George transferred the bulk of his assets to Dorothy. Dorothy assisted in the transfer of George’s assets and often completed checks and other papers for George’s signature. Although George and Dorothy had executed a prenuptial agreement, during the month preceding his death George made a new will that named Dorothy as his sole beneficiary. Patricia had been the sole beneficiary of his prior will. Through the transfers of assets and the new will, Dorothy received $570,000.a. What are the arguments that Patricia is entitled…arrow_forwardFrank lives alone in a one-bedroom apartment and is engaged to be married next year. He hasn't really thought much about long-term financial goals. He has been treating himself to the "necessities" of life courtesy of his credit card, but his spending isn't completely out of hand. Still, with upcoming wedding expenses, he doesn't want any unnecessary monthly payments. With respect to his current financial position, which of the following issues would be the most important for Frank to consider? Select one: O a. Follow the pay-yourself-first principle O b. Balance your savings goals O c. Continue with your RRSPs O d. Manage your debt, don't let your debt manage you.arrow_forwardGinny owns a house in northern Wisconsin that she rents for $1,600 per month. Ginny does not use the property personally. While she was in Europe for Christmas, the water heater on the property failed, and her tenants repaired it for $1,200. For the following month’s rent (January), her tenants paid her $400 for rent ($1,600 − $1,200). What amounts should Ginny include for rental income and repair expense, respectively, for January?arrow_forward
- Amandeep born in India and migrated to Australia. He lives in Australia permanently. He still holds Indian passport. Amandeep works with the New Zealand Princess Cruises tours and most of the income year is in New Zealand. He signed an employment contract for this position in the company’s Australian office in Sydney. Amandeep has two kids that are living with his wife Sandeep in Sydney. Three years ago, Amandeep purchased a unit apartment in Sydney. Amandeep and his wife holding dividend yielding shares in an Indian public company called Hindustan Unilever. Amandeep and Sandeep have an Australian bank account as well. Amandeep’s employer pays his salary to this bank account every fortnight.Biannually Amandeep receives a holiday package from his employer, New Zealand Princess Cruises tours and he is using this package with his family traveling in Australia interstates or moves to India to visit his in laws.Required:With reference to the relevant laws, discuss whether Amandeep is an…arrow_forwardAmandeep born in India and migrated to Australia. He lives in Australia permanently. He still holds Indian passport. Amandeep works with the New Zealand Princess Cruises tours and most of the income year is in New Zealand. He signed an employment contract for this position in the company’s Australian office in Sydney. Amandeep has two kids that are living with his wife Sandeep in Sydney. Three years ago, Amandeep purchased a unit apartment in Sydney. Amandeep and his wife holding dividend yielding shares in an Indian public company called Hindustan Unilever. Amandeep and Sandeep have an Australian bank account as well. Amandeep’s employer pays his salary to this bank account every fortnight. Biannually Amandeep receives a holiday package from his employer, New Zealand Princess Cruises tours and he is using this package with his family traveling in Australia interstates or moves to India to visit his in laws. Required: With reference to the relevant laws, discuss whether Amandeep…arrow_forwardTyrell has a tax service and accounting business in Redwood City. He decides to move to Center City, which is 150 miles away and sells his accounting practice to Able and Baker, a CPA firm. In the sales contract, he agrees that he will refrain from practicing accounting anywhere within a 20-mile radius of Redwood City for a period of two years. However, on weekends he returns to his house in Redwood City, and when clients call him, he meets with them in his home. The sales agreement: Ois being violated by Tyrell. O is invalid, because it is an illegal restraint of trade. O is illegal, because it is a violation of public policy. O will be divided into an enforceable, valid portion and an unenforceable, invalid portion, which is the time provision, because the two-year period is too long.arrow_forward
- Ashby and Curtis, married professionals, have a two-year-old son, Jason. Curtis works full-time as an electrical engineer, but Ashby has not worked outside the home since Jason was born. As Jason is getting older, Ashby thinks that Jason would benefit from attending nursey school several times a week, which would give her an opportunity to reinvigorate her love of painting at a nearby art studio. Ashby thinks that if she is lucky, the proceeds from the sale of her paintings will pay for the nursery school tuition. Ashby also is planning to claim the credit for child and dependent care expenses, because the care provided Jason at the nursery school is required for her to pursue her art career. Can Ashby and Curtis claim the credit for child and dependent car expenses for the nursery school expenditures? Why or why not?arrow_forwardMr Choi was born and raised in Hong Kong. In recent years, due to family-related reasons, he spends most of his time in Shenzhen. Though Mr Choi has a Hong Kong Identity Card, he seldom visits Hong Kong as most of his friends and relatives are in mainland China. In July 2019, Mr Choi purchased a residential property in Tai Po for $30,000,000 for investment purpose. After a quick renovation, the property was let to Mr Chan for two years, starting from 1 September 2019. The relevant terms of tenancy agreement are extracted below: monthly rent: $30,000, payable at the beginning of each month; rent-free period of a half-month from 1 September 2019; initial premium of $48,000, payable on signing the lease agreement; rates of $6,000 per quarter, payable by Mr Choi to the government; management fees: $2,000 per month, payable by the landlord; and rental deposit: $60,000 payable on signing the lease agreement. In October 2019, the property underwent certain repairs that cost $5,000; these…arrow_forwardSamuel Finley has two children, a daughter Lee and a son Keaton. Samuel has a lovely beach house in Palm Beach. Sam is terminally ill and has been told by his doctors that he has less than a year to live. Lee knows that Keaton is their father’s favourite child and that he had been named in the latter’s will to inherit the beach house. Lee knew that since their father did not have long to live and that he was 90 years old and starting to become mentally-weak, she could pressure him to transfer the Palm Beach beach house over to her even though Samuel may not totally understand what he was signing over. So, for four months, using pressure and threats, but more often with gentle but devious tactics, Lee succeeds in convincing Samuel to sign a transfer of property transferring the Palm Beach beach house over to her. As his last act, before he dies, Samuel wants to set aside the transfer of the beach house to Lee. Advise him of his legal position. (Use IRAC method)arrow_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
The Economics Of MARRIAGE; Author: Economic Raven;https://www.youtube.com/watch?v=I_M3RIMWju8;License: Standard Youtube License