South-western Federal Taxation 2018: Individual Income Taxes
41st Edition
ISBN: 9781337385886
Author: William H. Hoffman, James C. Young, William A. Raabe, David M. Maloney, Annette Nellen
Publisher: Cengage Learning
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Chapter 7, Problem 16DQ
To determine
Identify the relevant tax issue for Person A.
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James Jones is the owner of a small retail business operated as a sole proprietorship. During 2017, his business recorded the following
items of income and expense:
Revenue from inventory sales
Cost of goods sold
Business license tax
$147,000
Rent on retail space
Supplies
Wages paid to employees
Payroll taxes
Utilities
33,500
2,400
42,000
15,000
22,000
1,700
3,600
a. Compute taxable income attributable to the sole proprietorship by completing Schedule C to be included in James's 2017 Form
1040.
b. Compute self-employment tax payable on the earnings of James's sole proprietorship by completing a 2017 Schedule SE, Form
1040.
c. Assume your answers to parts a and b are the same for 2018. Further assume that James's business is not a service business, and
that it has $155,000 unadjusted basis in tangible depreciable property. Calculate James's 2018 Section 199A deduction.
Umair sold some equipments he used in his business on August 29, 2018, what originally purchased for $65,000 on Novermber 21, 2017. The equips yers MACRS method for a total of $17,249. Assume there is no additional actting of gaine and lossed for this taxtpayer.
Is the nature of the gain or loss considered ordinary or long-term?
How does the tax benefit rule apply in the following cases?
Question Content Area
a. In 2021, the Orange Furniture Store, an accrual method sole proprietorship, sold furniture on credit for $1,000 to Sammy. The cost of the furniture was $600. In 2022, Orange took a bad debt deduction for the $1,000. In 2023, Sammy inherited some money and paid Orange the $1,000 he owed. Orange's owner was in the 35% marginal tax bracket in 2021, the 12% marginal tax bracket in 2022, and the 35% marginal tax bracket in 2023.
Orange Furniture must include $fill in the blank 6af05cfde02efa1_1 in gross income as the recovery of a prior deduction. The timing of the income and deductions cost Orange $fill in the blank 6af05cfde02efa1_2.
Question Content Area
b. In 2022, Marvin, a cash basis taxpayer, took a $2,000 itemized deduction for state income taxes paid; the deduction was not limited by the SALT cap. This increased his itemized deductions to a total that was $800 more than the…
Chapter 7 Solutions
South-western Federal Taxation 2018: Individual Income Taxes
Ch. 7 - Prob. 1DQCh. 7 - Prob. 2DQCh. 7 - Prob. 3DQCh. 7 - Prob. 4DQCh. 7 - Many years ago, Jack purchased 400shares of Canary...Ch. 7 - Scan is in the business of buying and selling...Ch. 7 - Prob. 7DQCh. 7 - Prob. 8DQCh. 7 - Prob. 9DQCh. 7 - Prob. 10DQ
Ch. 7 - Prob. 11DQCh. 7 - Prob. 12DQCh. 7 - Prob. 13DQCh. 7 - Prob. 14DQCh. 7 - Prob. 15DQCh. 7 - Prob. 16DQCh. 7 - Prob. 17DQCh. 7 - Prob. 18DQCh. 7 - Prob. 19DQCh. 7 - Prob. 20DQCh. 7 - Last year Aleshia identified 15,000 as a...Ch. 7 - Prob. 22CECh. 7 - Prob. 23CECh. 7 - Prob. 24CECh. 7 - Prob. 25CECh. 7 - Prob. 26CECh. 7 - Prob. 27CECh. 7 - Prob. 28CECh. 7 - Prob. 29CECh. 7 - Prob. 30CECh. 7 - Prob. 31CECh. 7 - Prob. 32PCh. 7 - Monty loaned his friend Ned 20,000 three years...Ch. 7 - Sally is in the business of purchasing accounts...Ch. 7 - Prob. 35PCh. 7 - Prob. 36PCh. 7 - Prob. 37PCh. 7 - Prob. 38PCh. 7 - Prob. 39PCh. 7 - Prob. 40PCh. 7 - Prob. 41PCh. 7 - Prob. 42PCh. 7 - Prob. 43PCh. 7 - Prob. 44PCh. 7 - Prob. 45PCh. 7 - Prob. 46PCh. 7 - Prob. 47PCh. 7 - Prob. 48PCh. 7 - Prob. 49PCh. 7 - Prob. 50PCh. 7 - Prob. 51PCh. 7 - Prob. 52PCh. 7 - Prob. 53CPCh. 7 - Prob. 54CPCh. 7 - Prob. 1RPCh. 7 - Prob. 2RP
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