MCGRAW-HILL'S TAX.OF INDIV.+BUS.2020
20th Edition
ISBN: 9781259969614
Author: SPILKER
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 5, Problem 39P
For the following independent cases, determine whether economic income is present and, if so, whether it must be included in gross income (i.e., is it realized and recognized for tax purposes?).
- a) Asia owns stock that is listed on the New York Stock Exchange, and this year the stock increased in value by $20,000.
- b) Ben sold stock for $10,000 and paid a sales commission of $250. Ben purchased the stock several years ago for $4,000.
- c) Bessie is a partner in SULU Enterprises LLC. This year SULU reported that Bessie’s share of rental income was $2,700 and her share of municipal interest was $750.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
For the following independent cases, determine whether economic income is present and, if so, whether it must be included in gross income (i.e., is it realized and recognized for tax purposes?)
Asia owns stock that is listed on the New York Stock Exchange, and this year the stock increased in value by 20,000.
Ben sold stock for $10,000 and paid a sales commission of $250. Ben purchased the stock several years ago for $4,000.
Bessie is partner in SULU Enterprises LLC. This year SULU reported that Bessie’s share of rental income was $2,700 and her share of municipal interest was $750.
For the following independent cases, determine whether economic income is present and, if so, whether it must be included in gross income (i.e., is it realized and recognized for tax purposes?).
Note: Leave no answers blank. Enter zero if applicable.
Required:
Asia owns stock that is listed on the New York Stock Exchange, and this year the stock increased in value by $15,250.
Ben sold stock for $10,500 and paid a sales commission of $210. Ben purchased the stock several years ago for $4,200.
Bessie is a partner in SULU Enterprises LLC. This year SULU reported that Bessie's share of rental income was $2,850 and her share of municipal interest was $800.
Hanshaben
Chapter 5 Solutions
MCGRAW-HILL'S TAX.OF INDIV.+BUS.2020
Ch. 5 - Based on the definition of gross income in 61 and...Ch. 5 - Based on the definition of gross income in 61,...Ch. 5 - Describe the concept of realization for tax...Ch. 5 - Prob. 4DQCh. 5 - Prob. 5DQCh. 5 - Prob. 6DQCh. 5 - Prob. 7DQCh. 5 - Compare how the return of capital principle...Ch. 5 - This year Jorge received a refund of property...Ch. 5 - Describe in general how the cash method of...
Ch. 5 - Prob. 11DQCh. 5 - Prob. 12DQCh. 5 - Contrast the constructive receipt doctrine with...Ch. 5 - Dewey is a lawyer who uses the cash method of...Ch. 5 - Clyde and Bonnie were married this year. Clyde has...Ch. 5 - Distinguish earned income from unearned income,...Ch. 5 - Prob. 17DQCh. 5 - Prob. 18DQCh. 5 - Prob. 19DQCh. 5 - George purchased a life annuity to provide him...Ch. 5 - Prob. 21DQCh. 5 - Prob. 22DQCh. 5 - Clem and Ida have been married for several years,...Ch. 5 - Larry Bounds has won the Gold Bat Award for...Ch. 5 - Prob. 25DQCh. 5 - Prob. 26DQCh. 5 - Prob. 27DQCh. 5 - Explain why an insolvent taxpayer is allowed to...Ch. 5 - Prob. 29DQCh. 5 - Prob. 30DQCh. 5 - Prob. 31DQCh. 5 - Prob. 32DQCh. 5 - Explain how state and local governments benefit...Ch. 5 - Prob. 34DQCh. 5 - Prob. 35DQCh. 5 - Prob. 36DQCh. 5 - Prob. 37DQCh. 5 - Tom was just hired by Acme Corporation and has...Ch. 5 - For the following independent cases, determine...Ch. 5 - Prob. 40PCh. 5 - Prob. 41PCh. 5 - Prob. 42PCh. 5 - Prob. 43PCh. 5 - Prob. 44PCh. 5 - Last year Acme paid Ralph 15,000 to install a new...Ch. 5 - Prob. 46PCh. 5 - L. A. and Paula file as married taxpayers. In...Ch. 5 - Clyde is a cash-method taxpayer who reports on a...Ch. 5 - Identify the amount, if any, that these...Ch. 5 - Ralph owns a building that he is trying to lease....Ch. 5 - Anne purchased an annuity from an insurance...Ch. 5 - Larry purchased an annuity from an insurance...Ch. 5 - Prob. 53PCh. 5 - Lanny and Shirley divorced in 2018 and do not live...Ch. 5 - Prob. 55PCh. 5 - Grady received 8,200 of Social Security benefits...Ch. 5 - Prob. 57PCh. 5 - Nikki works for the Shine Company, a retailer of...Ch. 5 - Prob. 59PCh. 5 - Prob. 60PCh. 5 - Grady is a 45-year-old employee with AMUCK Garbage...Ch. 5 - Prob. 62PCh. 5 - Prob. 63PCh. 5 - Cecil cashed in a Series EE savings bond with a...Ch. 5 - Prob. 65PCh. 5 - Prob. 66PCh. 5 - Terry was ill for three months and missed work...Ch. 5 - Prob. 68PCh. 5 - Prob. 69PCh. 5 - This year, Janelle received 200,000 in life...Ch. 5 - Prob. 71PCh. 5 - Prob. 72PCh. 5 - Charlie was hired by Ajax this year as a corporate...Ch. 5 - Irene is disabled and receives payments from a...Ch. 5 - Ken is 63 years old and unmarried. He retired at...Ch. 5 - Prob. 76CPCh. 5 - Diana and Ryan Workman were married on January 1...
Additional Business Textbook Solutions
Find more solutions based on key concepts
18. What is the calculation for return on assets (ROA)? Explain what ROA measures.
Horngren's Financial & Managerial Accounting, The Financial Chapters (6th Edition)
What are assets limited as to use and how do they differ from restricted assets?
Accounting for Governmental & Nonprofit Entities
The amount that should be recorded by Company R for building under historical cost principle.
Financial Accounting (11th Edition)
E6-14 Using accounting vocabulary
Learning Objective 1, 2
Match the accounting terms with the corresponding d...
Horngren's Accounting (11th Edition)
1. For Frank’s Funky Sounds, straight-line depreciation on the trucks is a
Learning Objective 1
a. variable cos...
Horngren's Accounting (12th Edition)
This year, Prewer Inc. received a 160,000 dividend on its investment consisting of 16 percent of the outstandin...
PRINCIPLES OF TAXATION F/BUS.+INVEST.
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
- Determine the taxpayers gross income for tax purposes in each of the following situations: a. Deb, a cash basis taxpayer, traded a corporate bond with accrued interest of 300 for corporate stock with a fair market value of 12,000 at the time of the exchange. Debs cost of the bond was 10,000. The value of the stock had decreased to 11,000 by the end of the year. b. Deb needed 10,000 to make a down payment on her house. She instructed her broker to sell some stock to raise the 10,000. Debs cost of the stock was 3,000. Based on her brokers advice, instead of selling the stock, she borrowed the 10,000 using the stock as collateral for the debt. c. Debs boss gave her two tickets to the Rabid Rabbits rock concert because she met her sales quota. At the time she received the tickets, each ticket had a face price of 200 and was selling on eBay for 300. On the date of the concert, the tickets were selling for 250 each. Deb and her son attended the concert.arrow_forwardIn each of the following problems, identify the tax issue(s) posed by the facts presented. Determine the possible tax consequences of each issue that you identify. Binh met Anika 10 years ago at a cocktail party. Anika was a wealthy investor with extensive holdings in the oil and gas industry. Binh was a real estate agent earning about 35,000 a year. Several months later, Binh proposed marriage and Anika accepted. Just before the wedding, Anika told Binh that she had a mental hangup about marriage, and Binh agreed to live with her without being married. In return, Anika promised to leave Binh her entire estate. In the ensuing years, they had an intimate, marriage-like relationship, attending social, business, and family functions together. Anika died in 2015. No will was found immediately. A few months after Anikas death, her sister found a one-page paper signed by Anika. The paper left Anikas entire estate to her brothers and sisters and named her sister as executor of the estate. Binh sued Anikas estate and won a judgment of 2 million for services rendered to Anika during their relationship. The estate appealed the decision, which was affirmed as to liability but reversed and remanded for a new trial on the amount of the judgment. Binh and the estate subsequently worked out an agreement in which the estate paid Binh 1.2 million to settle his claim.arrow_forwardHow do I calculate the dollar amount to be included in Gross Income for this assignment Question. <>Ken sold 1,000 shares of stock for $32 a share. He inherited the stock two years ago. His tax basis (or investment) in the stock was $31 per share.arrow_forward
- Mr. Pamplona earned total gross receipts of P800,000 and paid P300,000 in expenses in his accounting practice. During the same year, he also earned a total of P60,000 net gain from the sale of domestic stocks directly to a buyer. He also disposed a vacant lot at a net gain of P140,000. What is the taxable income of Mr. Pamplona subject to regular income tax?arrow_forwardAna, a resident citizen, provided the following data for year current taxable year: Gross income from business (gross of P12,000 CWT) Business Expenses Royalty from books Gain on direct sale to buyer of shares of stock of a domestic corporation held as capital asset Loss on sale of land in the Philippines held as capital asset with cost of P1,500,000 when the zonal value is P1,200,000 How much is the total income tax expense of Ana? 159,500 207,500 116,500 156,000 P700,000 300,000 40,000 70,000 500,000arrow_forward1. Alex is an Australian resident for tax purposes. She currently works as a financial advisor in Melbourne. Her total salary for the income year ended 30 June 2020 is $120,000, from which her employer withheld Pay As You Go (PAYG) income tax instalments totalling $34,217.00. Alex also has a share portfolio which has generated franked dividends of $7,000 and franking credits of $3,000. Alex took out a loan to purchase the shares and she incurred interest expenses of $5,000. What is Alex’s assessable income? Select one: $125,000 $122,000 $127,000 $130,000arrow_forward
- Accounting Gary wants you to calculate his personal income tax liability. He is a tax resident of Australia. During the year ended 30 June 2022 he received the following: Gross salary and wages of $138,000. His employer deducted from his salary PAYGW tax of $22,523. Interest income of $678 from the ANZ Bank Interest of $32 from the BNZ Bank in New Zealand. The $32 is after the New Zealnd Tax Authorities deducted withholding tax of $5.2O. A dividend of $156 from Rio Tinto. He also spent $250 on text books for his work as an IT engineer. He does not have private hospital cover. Required: Calculate his taxable income and his total tax payable for the year ended 30 June 2022.arrow_forwardDetermine the taxpayer's gross income for tax purposes in each of the following situations: If an amount is zero, enter "0". Gross Income a. Deb, a cash basis taxpayer, traded a corporate bond with accrued interest of $300 forcorporate stock with a fair market value of $12,000 at the time of the exchange. Deb's cost ofthe bond was $10,000. The value of the stock had decreased to $11,000 by the end of theyear. $fill in the blank 1 b. Deb needed $10,000 to make a down payment on her house. She instructed her broker to sellsome stock to raise the $10,000. Deb's cost of the stock was $3,000. Based on her broker'sadvice, instead of selling the stock, she borrowed the $10,000 using the stock as collateral forthe debt. $fill in the blank 2 c. Deb's boss gave her two tickets to the Rabid Rabbits rock concert because she met her salesquota. At the time she received the tickets, each ticket had a face price of $200 and was sellingon eBay for $300. On the…arrow_forward1. In 2022, Ms. Julie gross receipts from his practice of profession is P 1,600,000 while her wife has gross sales of P1,200,000 derived from her trading business. Assuming that they are not VAT-registered person, will they be subject to VAT? Why? If YES, compute their tax due; if NO, rationalize your answer.arrow_forward
- Chuck, a single taxpayer, earns $80,200 in taxable income and $12,900 in interest from an investment in City of Heflin bonds. (Us the U.S tax rate schedule.) Required: a. How much federal tax will he owe? b. What is his average tax rate? c. What is his effective tax rate? d. What is his current marginal tax rate? Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D How much federal tax will he owe? Note: Do not round intermediate calculations. Round "Federal tax" to nearest whole dollar amount. Federal taxarrow_forwardAccrual Criterion and Progressivity. Let's consider William, which Salary is 200. Three years ago he bought some shares for 50. This year he sold them for 350. Find the Taxable Income, and tax payable in each case that result from to apply the different techniques to resolve problems of accruel criterion and progressivity in Personal income tax. Compare three cases: doing nothing special, annualized income system (letter b), and Spanish Solution with a proportional tax rate of 19% for capital gains and rest of income at general tax rate scale (letter c) • What things would change if we are talking of an irregular income from business, instead of being a capital gain? • What things would change if the number of years between the buying and the selling of shares was 5, instead of 3?arrow_forwardEmma, a U.S. resident, received the following income items for the current tax year. Identify the sourcing of each item as either U.S. or foreign. $600 interest from a savings account at a Florida bank. $5,000 dividend from U.S. Flower Company, a U.S. corporation that operates solely in the eastern United States. $7,000 dividend from Stern Corporation, a U.S. corporation that generated total gross income of $4,000,000 from the active conduct of a foreign trade or busi- ness for the immediately preceding three tax years. Stern’s total gross income for the same period was $5,000,000.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
9 Different Types of Stocks | Investing For Beginners; Author: Kiana Danial - Invest Diva;https://www.youtube.com/watch?v=CdJYcjZfCH0;License: Standard Youtube License