Reference no: EM133178812

Question -

Q1- How might a taxpayer postpone or delay the recognition of income?

Q2- Are there advantages to leasing rather than buying assets?

Q3- How can donating appreciated stock to a charitable organization, rather than giving cash, be beneficial to a taxpayer?

Q4- Mary transfers assets that yield interest income of $2,300 each year to her daughter, Missy, age 12. How will the interest be taxed to Missy?

Q5- Andrew, an employee, has the following expenses during 2021: Moving expenses $5,000

State and local income and property taxes 2,000

Gambling losses to the extent of gambling winnings 300

How much of these items would be included in Andrew's itemized deductions?

Q6- Matt, single, age 35, has an adjusted gross income of $67,000. He is a participant in a qualified retirement plan, but is eligible to invest in a deductible IRA. What is the amount of his allowable IRA deduction for 2021?

Q7- The Baker partnership was formed and began business November 1, 2021. It incurred the following costs: legal fees from drafting partnership agreement, $4,000; accounting fees for establishing financial records, $3,000; recording fees payable to local government, $500; and expenses of organizational meeting, $1,500. The partnership is reporting on the accrual method and adopted the calendar year. It actually paid all of the above costs, except the accounting fee, on January 3, 2022. It is expected that the partnership will last 12 years, and the treasurer proposes to write off 2/144 × $9,000 for 2021. Discuss.

Q8- Partner Johnson owns a 4 percent interest in the Magma Partnership, an accrual basis, calendar year concern. On January 1, 2021, Johnson, a cash basis taxpayer, loaned the partnership $20,000 at 9 percent annual interest. Magma reported 2021 ordinary partnership income of $12,000 for financial purposes. Johnson was not paid his interest until February 3, 2022. Discuss the tax treatment for the partnership and the partner.

Q9- If a taxpayer owns property with a great growth but little income potential, the taxpayer is generally better advised to hold that property as an individual investor or to transfer it to a controlled corporation, let it appreciate in value, and then sell the stock. Discuss.

Q10- Delta Corporation, an S corporation, has $30,000 of taxable income before charitable contributions. The corporation has $5,000 in charitable contributions for the year. What is Delta's charitable contribution deduction?

Q11- An S corporation is on the accrual basis and the sole shareholder is on the cash basis. For the pay period ending December 27, 2021, the shareholder earns a salary of $400. He is paid on January 3, 2022. What is the amount allowable as a deduction for 2021?

Q12- Alpha Corporation, a calendar year S corporation, has no accumulated earnings and profits at the end of the year. An individual shareholder receives a cash distribution of $10,000 during the year. How will this distribution be recognized, assuming the shareholder has an $8,200 basis in his stock?