Hakeem, one of your firm’s clients, is a shareholder in Cedar Corporation. Cedar Corporation has an S corporation election in effect. During the 2021 calendar tax year, the corporation had ordinary taxable income of $200,000, and on January 15, 2021, the corporation paid dividends to shareholders in the amount of $120,000. Hakeem has asked what how much of that he needs to report on his income taxes. Your supervisor has asked you to follow up with Hakeem to get the information needed to make this determination.
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Hakeem, one of your firm’s clients, is a shareholder in Cedar Corporation. Cedar Corporation has an S corporation election in effect. During the 2021 calendar tax year, the corporation had ordinary taxable income of $200,000, and on January 15, 2021, the corporation paid dividends to shareholders in the amount of $120,000. Hakeem has asked what how much of that he needs to report on his income taxes. Your supervisor has asked you to follow up with Hakeem to get the information needed to make this determination.
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- Troy, a cash basis taxpayer, is employed by Eagle Corporation, also a cash basis taxpayer. Tray is a full-time employee of the corporation and receives a salary of 60,000 per year. He also receives a bonus equal to 10% of all collections from diems he serviced during the year. Determine the tax consequences of the following events to the corporation and to Troy: a. On December 31, 2019, Troy was visiting a customer. The customer gave Troy a 10,000 check payable to the corporation for appraisal services Troy performed during 2019. Troy did not deliver the check to the corporation until January 2020. b. The facts are the same as in part (a), except that the corporation is an accrual basis taxpayer and Troy deposited the check on December 31, but the bank did not add the deposit to the corporations account until January 2020. c. The facts are the same as in part (a), except that the customer told Troy to hold the check until January 2020 when the customer could make a bank deposit that would cover the check.In 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. Ariel has worked for Sander Corporation for 30 years. Sander has a pension plan in which it matches employee contributions by up to 5 percent of the employees salary. Ariel, who is single, retires during the current year when she is 66 years old. Her pension plan contains payments and earnings of 300,000, half of which are attributable to payments made by Ariel and half attributable to payments made by Sander. Under the plan, Ariel is to receive 2,000 per month until she dies.Hakeem, one of your firm’s clients, is a shareholder in Cedar Corporation. Cedar Corporation has an S corporation election in effect. During the 2021 calendar tax year, the corporation had ordinary taxable income of $200,000, and on January 15, 2021, the corporation paid dividends to shareholders in the amount of $120,000. Hakeem has asked what how much of that he needs to report on his income taxes. Your supervisor has asked you to follow up with Hakeem to get the information needed to make this determination. Write a letter to Hakeem explaining how his taxable income would be calculated and asking for the information that is stil
- Moc Corporation reports on the calendar year and has made the S Corporation election. It distributed $200,000 in cash to its only shareholder, Marmi on December 31, 2020. Marmi has a basis in her stock of $225,000O and Moc Corporation has a AAA balance of $125,000 and a AEP balance of $50,000 before the distribution. Knowing this, explain how the distribution will be taxed (if at all) to Marmi.Cally, who is married and has one child, owns a bakery. During the 2021 tax year, her Sales $ 55,000, Purchases of trading stock $ 60,000, Business Overheads $ 10,000, Opening Stock Value $ 20,000, Closing Stock Value $ 15,000, Drawings on Trading Stock, use the Commissioner’s standard values Required: Refer to sections in the legislation and/ or cases/ Tax Rulings and answer the following questions: (a) Calculate and explain Cally’s Taxable Income for the 2021 tax year. (b) If Cally hired an electrician to rewire the ovens in her shop, can she also claim his fee of $5,000 as a deduction if, on 30 June 2021, all work had been completed, but Cally is still waiting on his invoice?Michael is a self-employed certified public accountant and began his business in 2021. During 2021, he purchased a $1,000 computer and a $400 desk chair. He also paid $7,000 in legal/incorporation fees and spent $14,000 for a new HVAC system for the office building he owns. Which purchase(s) can he expense in 2021 without limitation, if he has the appropriate accounting procedures in place, prior to the beginning of the tax year? (a) Computer and desk only. (b) Computer, desk, legal/incorporation fees only. (c) Computer, desk, legal/incorporation fees, HVAC. (d) Legal/incorporation fees, HVAC only.
- Troy, a cash basis taxpayer, is employed by Eagle Corporation, also a cash basis taxpayer. Troy receives a salary of $60,000 per year. He also receives a bonus equal to 10% of all collections from clients he serviced during the year (which he receives in January of the following year). Determine the tax consequences of the following events to the corporation and to Troy: a. On December 31, 2023, Troy was visiting a customer. The customer gave Troy a $10,000 check payable to the corporation for appraisal services Troy performed during 2023. Troy did not deliver the check to the corporation until January 2024. The corporation recognizes the income in: Troy recognizes the bonus related to this collection in: Question Content Area b. Assume Eagle Corporation is an accrual basis taxpayer. On December 31, 2023, Troy was visiting a customer. The customer gave Troy a $10,000 check payable to the corporation for appraisal services Troy performed during 2023. Troy deposited the…Raquel is an employee of Jones Company and owns a 30 percent interest in the company. Her salary is $44,000. She also receives a $10,000 cash distribution from Jones. During the current year, Jones's operating income is $130,000.Identify the tax issue posed by the facts presented, and determine the possible tax consequences of each issue that you identify.Gloria Edwards is a consultant. For 10 years, until June 30, 2021, she had been employed by IBM Ltd., a national computer company. On July 1, 2021, she began to practise law as a sole proprietor from an office in her home. Required: Gloria would like you to calculate his Net Income for Tax Purposes (Division B income) for 2021. You should indicate why you did not include any of the above amounts in your answer. Show all your work to get full marks. At a recent meeting, you gathered the information provided in Exhibits I and II. EXHIBIT I Gloria Edwards Information Regarding Work at IBM and Law Practice 1. Gloria’s salary to June 30, 2021, was $80,750. From this, IBM deducted CPP and EI of $4,056, income tax of $21,000, and $600 for Gloria’s portion of the private group medical insurance premium. An additional premium of $400 was paid by IBM. Also, IBM paid the $700 premium for Gloria’s group term life insurance coverage of $100,000. Gloria also received a pro-rated amount under the…
- Carlson's general business credit for the current year is $114,450. His net income tax is $251,790, tentative minimum tax is $226,611, and net regular tax liability is $239,201. He has no other Federal income tax credits. Determine Carlson's general business credit allowed for the year, and any amounts that can be carried back and forward. Carlson's general business credit allowed for the year is $_________ and his unused general business credit of $_______ may be carried back or forward.Mr. Allen is a 65-year-old Jamaican tax resident. He is the director of a hotel, Allen’s Rest Well Resort. He has requested that your firm assist with the preparation of his 2021 income tax computation. He provided you with the following information: a) Gross salary $7,000,000 per year. b) As a retired teacher, he receives a monthly pension of $75,000 from the Accountant General. PAYE of $225,000 was deducted.c) He sold shares held in NCB for $200,000. Making a gain of $35,000. d) As part of his compensation, he receives a meal allowance of $6,000 per week. e) The company also pays his son school fees for $70,000 per term. (Assume three terms)f) Income from the rental of his personal investment property was $1,500,000. Expenses was $650,000. Capital allowance for this property was $180,000. g) He receives dividend of income of 127,500 (net) form investment held at JMMB. $22,500 withheld at source. h) During the year he paid quarterly estimated tax totaling $80,000 Which tax returns…Mr. Allen is a 65-year-old Jamaican tax resident. He is the director of a hotel, Allen’s Rest Well Resort. He has requested that your firm assist with the preparation of his 2021 income tax computation. He provided you with the following information: a) Gross salary $7,000,000 per year. b) As a retired teacher, he receives a monthly pension of $75,000 from the Accountant General. PAYE of $225,000 was deducted. c) He sold shares held in NCB for $200,000. Making a gain of $35,000. d) As part of his compensation, he receives a meal allowance of $6,000 per week. e) The company also pays his son school fees for $70,000 per term. (Assume three terms) f) Income from the rental of his personal investment property was $1,500,000. Expenses was $650,000. Capital allowance for this property was $180,000. g) He receives dividend of income of 127,500 (net) form investment held at JMMB. $22,500 withheld at source. h) During the year he paid quarterly estimated tax totaling $80,000 Required 1.…