Reference no: EM134940
Probability of Audit:
Assess the probability of an audit in each of the following independent situations:
As a result of a jury trial, Linda was awarded $3.5 million because of job discrimination. The award included $3 million for punitive damages.
Mel operates a combination pawnshop and check-cashing service.
Jayden, a self-employed trial lawyer, regularly files a Schedule C (Form 1040) that, due to large deductions, reports little (if any) profit from his practice.
Bernard is the head server at an upscale restaurant and recently paid $1.8 million for a residence in an exclusive gated community.
Homer has yearly adjusted gross income (AGI) of around $70,000 and always claims the standard deduction. He operates for a builder installing wallboard in new homes.
Gloria lost a Form 1099-DIV that she received from a corporation that paid her a dividend.
Cindy, a former vice president of a bank, has been charged with embezzling large sums of money.
Giselle is a cocktail waitress at an upscale nightclub. She has been audited several times in past years.
Marcus was recently assessed a large state income tax deficiency by the state of California for his utilization of an abusive tax shelter.
Guy, a professional gambler, recently broke up with his companion of ten years and married her teenage daughter.
Role of IRS in Transactions:
A mother sells a valuable collection of antiques to her daughter for $1,000. What judicial concept might the IRS invoke to question this transaction?
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Evaluate free assets
: For how much do these free assets have to be sold so that the creditors associated with Debt 2 receive exactly $170,800?
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How much money will be paid to creditor associated with debt
: How much money will be paid to the creditor associated with each debt. Salary during last month owed to Mr. Key Salary during last month owed to Ms. Rankin Unsecured accounts payable Government claims to unpaid taxes Administrative expenses
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Determine breakeven point in units at current sale price
: Which of the following is the excess of the selling price per unit of a product over the variable cost of obtaining and selling each unit. Determine the breakeven point in units at the current sale price
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Should goodguys ltd. accept the offer
: The division is dropped, the staff will be laid-off, with the exception of one person who will be assigned to another job. Her salary is $45,000. Should the division be dropped?
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Probability of audit
: Probability of Audit - What judicial concept might the IRS invoke to question this transaction
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Prepare a 2012 tax return
: Prepare a 2012 tax return using the following information. Forms 1040, Schedule A, Schedule B, Schedule C, Schedule SE (only need to complete page 1), Form 4562.
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Evaluate the basis of each shareholders stock
: Evaluate the basis of each shareholder's stock in the new corporation. Determine the basis of each property in the hands of the corporation.
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Prepare absorption and contribution margin income statements
: Prepare absorption and contribution margin income statements for the succeeding quarter for the division. Compute production costs per unit for both approaches and for both quarters.
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Highest amount of income tax expense
: Which depreciation method would result in the highest amount of income tax expense being paid in the first year of an asset's useful life
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