Reference no: EM13839729
1. During the current year, Gene, a CPA, performs services as follows: 1,800 hours in his tax practice and 50 hours in an apartment leasing operation in which he has a 15% interest. Because of his oversight duties, Gene is considered to be an active participant. He expects that his share of the loss realized from the apartment leasing operation will be $30,000 while his tax practice will show profit of approximately $80,000. Gene is single and has no other income. Discuss the character of the income and losses generated by these activities
2. You have just met with Scott Myers (603 Pittsfield Drive, Champaign, IL 61821), a successful full-time real estate developer and investor. During your meeting, you discussed his tax situation because you are starting to prepare his current Federal income tax return. During your meeting, Scott mentioned that he and his wife, Susan, went to great lengths to maximize their participation in an apartment complex that they own and manage. In particular, Scott included the following activities in the 540 hours of participation for the current year:
- Time spent thinking about the rentals.
- Time spent by Susan on weekdays visiting the apartment complex to oversee operations of the buildings (i.e., in a management role).
- Time spent by both Scott and Susan on weekends visiting the apartment complex to assess operations. Scott and Susan always visited the complex together on weekends, and both counted their hours (i.e., one hour at the complex was two hours of participation).
- Time spent on weekends driving around the community looking for other potential rental properties to purchase. Again, both Scott's hours and Susan's hours were counted, even when they drove together.
After reviewing Scott's records, you note that the apartment complex generated a significant loss this year. Prepare a letter to Scott describing your position on the deductibility of the loss.
would like to know why the Scott having a significant loss and what should I said to Scott?
Full range of possible events and responses-economic theory
: Economic theory offers ______ about the full range of possible events and responses, which can prevent _______ about how households will respond to changes in prices or incomes.
|
Why did auasb propose the changes
: Compare the proposed Australian changes to the auditors' report with the auditors' report on a large listed FTSE100 company from the UK and a large listed FORTUNE100 company from the US. Present your comparison using a table or a figure/chart.
|
What affirmative defenses can johnny raise
: Johnny, the CEO of Plastic Spoon Inc., is in a bit of a bind. His daughter was kidnapped. The kidnappers are demanding a hefty ransom. Unfortunately for Johnny, he cannot afford the ransom. So, Johnny withdraws the ransom money from Plastic Spoon's a..
|
What are the cash flows now and in one year
: What are the cash flows now and in one year? ( Hint: Remember the dividend the stock will pay.) Show that the equilibrium futures price must be F 0 5 S 0 (1 1 r ) 2 D to avoid arbitrage. Call the dividend yield d 5 D / S 0 , and conclude that F 0 5 S..
|
Define potential rental properties to purchase
: During the current year, Gene, a CPA, performs services as follows: 1,800 hours in his tax practice and 50 hours in an apartment leasing operation in which he has a 15% interest. Because of his oversight duties, Gene is considered to be an active ..
|
Find the vector sum of a force
: find the vector sum of a force
|
Why is sustainability a complex and controversial concept
: Why is ‘sustainability' a complex and controversial concept? Why do existing sustainability models emphasise systems thinking?
|
Prepare the closing entries for fenske company
: A partial adjusted trial balance for Fenske Company is given- Instructions- Prepare the closing entries at January 31, 2012
|
How to calculate concentration of these species at equilbriu
: How to calculate the concentration of these species at equilibrium
|