Individual Income Taxes
43rd Edition
ISBN: 9780357109731
Author: Hoffman
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Chapter 6, Problem 38P
Duck, an accrual basis corporation, sponsored a rock concert on December 29, 2019. Gross receipts were $300,000. The following expenses were incurred and paid as indicated:
Because the coliseum was not scheduled to be used again until January 15, the company with which Duck had contracted did not perform the cleanup until January 8–10, 2020.
- a. Calculate Duck’s net income from the concert for tax purposes for 2019.
- b. Using the present value tables in Appendix H, what is the true cost to Duck if it had to defer the $100,000 deduction for the performers until 2020? Assume a 5% discount rate and a 21% marginal tax rate in 2019 and 2020.
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1. During the year ended December 31, 2021, management of
Alpha Corporation (the Company) decided to sell a piece of
its idle equipment. The equipment had an original tax cost
of $75,000 and as of December 31, 2020, tax depreciation
of $75,000 had been taken on the equipment. The
equipment was sold to an unrelated party for $95,000 cash
on June 15, 2021. For the purpose of requirement 3, assume
that the book cost and book depreciation have been the
same as the tax cost and tax depreciation.
Required:
1. Calculate the tax gain on sale of the equipment.
2. Calculate the portion of the gain that is depreciation
recapture.
3. Prepare the journal entry to record sale of the equipment.
On January 1, 2021, Sheridan, Inc. purchased a machine for $2180000 which will be depreciated $218000 per year for financial statement reporting purposes. For income tax reporting, Sheridan elected to expense $243000 and to use straight-line depreciation which will allow a cost recovery deduction of $193000 for 2021. Assume a present and future enacted income tax rate of 20%. What amount should be added to Sheridan's deferred income tax liability for this temporary difference at December 31, 2021?
You are provided the following transactions which occurred during the tax year which 31 December 2022 for Serowe Ltd.
The company disposed some of its Heavy Plant and Machinery that it had bought on 30 November 2020 for P1,200,000. The company received P350,000. Serowe Ltd bought new Plant and Machinery to replace the disposed ones for P3,200,000.
Assume that the company elects to apply rollover relief, calculate the capital allowances on the new plant and machinery for the current tax year.
Chapter 6 Solutions
Individual Income Taxes
Ch. 6 - Prob. 1DQCh. 6 - Prob. 2DQCh. 6 - Classify each of the following expenditures paid...Ch. 6 - Prob. 4DQCh. 6 - Prob. 5DQCh. 6 - Prob. 6DQCh. 6 - Prob. 7DQCh. 6 - Prob. 8DQCh. 6 - Prob. 9DQCh. 6 - Prob. 10DQ
Ch. 6 - Prob. 11DQCh. 6 - Prob. 12DQCh. 6 - Prob. 13DQCh. 6 - Prob. 14DQCh. 6 - Linda operates an illegal gambling operation....Ch. 6 - Prob. 16DQCh. 6 - Melissa, the owner of a sole proprietorship, does...Ch. 6 - Prob. 18DQCh. 6 - Blaze operates a restaurant in Cleveland. He...Ch. 6 - Prob. 20DQCh. 6 - Prob. 21DQCh. 6 - Ray loses his job as a result of a corporate...Ch. 6 - Lavinia incurs various legal fees in obtaining a...Ch. 6 - Prob. 24DQCh. 6 - Prob. 25DQCh. 6 - Shanna, a calendar year and cash basis taxpayer,...Ch. 6 - Prob. 27CECh. 6 - Maud, a calendar year taxpayer, is the owner of a...Ch. 6 - Vella owns and operates an illegal gambling...Ch. 6 - Printer Company pays a 25,000 annual membership...Ch. 6 - Stanford owns and operates two dry cleaning...Ch. 6 - Tobias has a brokerage account and buys on the...Ch. 6 - Prob. 33PCh. 6 - Prob. 34PCh. 6 - Janice, age 32, earns 50,000 working in 2019. She...Ch. 6 - Prob. 36PCh. 6 - Prob. 37PCh. 6 - Duck, an accrual basis corporation, sponsored a...Ch. 6 - Prob. 39PCh. 6 - Prob. 40PCh. 6 - Prob. 41PCh. 6 - Prob. 42PCh. 6 - Terry traveled to a neighboring state to...Ch. 6 - Prob. 44PCh. 6 - Prob. 45PCh. 6 - Prob. 46PCh. 6 - Prob. 47PCh. 6 - Prob. 48PCh. 6 - Prob. 49PCh. 6 - Prob. 50PCh. 6 - Prob. 51PCh. 6 - Brittany Callihan sold stock (basis of 184,000) to...Ch. 6 - Prob. 53PCh. 6 - Prob. 54PCh. 6 - Prob. 55PCh. 6 - Prob. 56PCh. 6 - Prob. 57CPCh. 6 - Prob. 58CPCh. 6 - Prob. 1RPCh. 6 - Prob. 2RPCh. 6 - Prob. 3RPCh. 6 - Which of the following is a deduction for AGI? a....Ch. 6 - Which of the following is not a deduction for AGI?...Ch. 6 - David is a CPA and enjoys playing the lottery....Ch. 6 - Prob. 4CPACh. 6 - Prob. 5CPACh. 6 - Prob. 6CPA
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