Reference no: EM13972776
Using the income concepts presented in this chapter, discuss whether the taxpayer has realized income in each of the following situations:
a. Adco Corporation pays the health insurance premiums for all its employees. Adrian is an employee of Adco. Health insurance premiums Adco pays for Adrian cost $1,150 for the current year.
b. The Sung Partnership buys a parcel of unimproved land for $32,000. Sung spends an additional $22,000 to put in roads and sewerage and to grade the property for subdividing. The property is subdivided into 15 lots and offered for sale at $10,000 per lot.
c. Doctors and nurses at Valley View Hospital are allowed to eat free of charge in the hospital cafeteria during their shifts. Sue, a doctor, eats meals valued at $1,900 dur- ing the current year.
d. Wayman wins the golf championship at his country club. In addition to a handsome trophy, he receives merchandise worth $500 for winning the tournament.
e. Rock signs a contract to play football for the Rangers. In addition to a salary of $1,000,000 per year for 5 years, he is to receive a signing bonus of $5,000,000 to be paid 10 years from the date the contract was signed.
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Taxable income and income tax liability
: What is Leroy and Amanda's current year taxable income and income tax liability?
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Should the firm make this investment
: Assume that this project requires a $400,000 investment today (or else the future cash flows will not happen). Should the firm make this investment?
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Marginal tax bracket
: Art is in the 28% marginal tax bracket for 2010. He owes a $10,000 bill for business expenses. Because he reports taxable income on a cash basis, he can deduct the $10,000 in either 2010 or 2011
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Assuming the projects are independent
: Assuming the projects are independent, which one or ones would you recommend? If the projects are mutually exclusive, which would you recommend?
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Health insurance premiums
: Adco Corporation pays the health insurance premiums for all its employees. Adrian is an employee of Adco. Health insurance premiums Adco pays for Adrian cost $1,150 for the current year.
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How the rephrasing has enhanced communication
: Use the principles discussed in the article You-Attitude: A Linguistic Perspective, to rephrase the passages in a manner that increases communication efficacy. List the principles you used in each passage and explain how and why they have enhanced ..
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The mayor opened contract talks with the union
: The mayor opened contract talks with the union representing local policemen. While the salesmen are at the convention, their wives will be treated to a tour of the city's landmarks. Our company gives each foreman the day off on his birthday.
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Prepare a 10 minute presentation on the following topic.
: Using examples from post 2007 financial crisis, discuss whther lack of transparency was responsible for the failure of financial institutions?
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Constructive receipt of income
: Determine whether the taxpayer in each of the following situations is in constructive receipt of income. If not, explain when the income will be constructively received.
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