South-Western Federal Taxation 2019: Individual Income Taxes (Intuit ProConnect Tax Online 2017 & RIA Checkpoint 1 term (6 months) Printed Access Card)
42nd Edition
ISBN: 9781337702546
Author: James C. Young, William H. Hoffman, William A. Raabe, David M. Maloney, Annette Nellen
Publisher: Cengage Learning
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Chapter 7, Problem 1RP
To determine
Explain whether Person is entitled to a
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During 2016, John was the chief executive officer and a shareholder of Maze, Inc. He owned
60% of the outstanding stock of Maze. In 2013, John and Maze, as co borrowers, obtained a
$100,000 loan from United National Bank. This loan was secured by John's personal residence.
Although Maze was listed as a co-borrower, John repaid the loan in full in 2016. On Maze's form
1120 tax returns, no loans from shareholders were reported. Discuss whether John is entitled
to a bad debt deduction for the amount of the payment on the loan.
On March 5, 2016, Mr. and Mrs. Horton borrowed $100,000 against the equity in their personal residence with the loan secured by that home. For 2016 and 2017, they were able to deduct the interest expense on this loan as home equity interest expense [an itemized deduction on Schedule A (Form 1040)]. The Tax Cuts and Jobs Act of 2017 disallows this interest expense deduction for 2018 through 2025. The Hortons’ CPA has asked them to review their financial records for February and March of 2016. They discover that they sold Disney stock on February 20, 2016, and used the proceeds to purchase Microsoft stock. Why is their CPA asking them for this information? How might this stock purchase in March 2016 help them obtain a deduction for all or part of the interest paid in 2018 and later on this home equity loan?
Partial list of research aids:
Reg. § 1.163–8T.
Notice 89–35, 1989–1 C.B. 675.
Use internet tax resources to address the following questions. Look for reliable websites and…
Ted earned $150,000 during the current year. He paid Alice, his former wife, $75,000 in alimony. The couple divorced in 2016. Under these facts, the tax is paid by the person who benefits from the income rather than the person who earned the income.
True
False
Chapter 7 Solutions
South-Western Federal Taxation 2019: Individual Income Taxes (Intuit ProConnect Tax Online 2017 & RIA Checkpoint 1 term (6 months) Printed Access Card)
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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