Congress has enacted two special rules under MACRS, immediate expensing (§179) and additional first year “bonus” depreciation. With the current limitations in place, will these special rules provide significant business deductions for small and mid-sized business owners? Will these special rulings impact deductions for large corporate entities?
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- Congress has enacted two special rules under MACRS, immediate expensing (§179) and additional first year “bonus” depreciation. With the current limitations in place, will these special rules provide significant business deductions for small and mid-sized business owners? Will these special rulings impact deductions for large corporate entities? *********PLEASE SEND A NEW ANSWER*********** THANK YOU!!!!!In class we discussed how large corporations may have statutory limits on certain business expense deductions taken on their US Form 1120. These include the deduction for interest expense, net operating losses, charitable contributions, and employee compensation. Select 2 of these statutory rules, provide the relevant IRC code section, and an explanation of the rule (in your own words) as well as a mechanical example of how the rule works (do not use the exact amounts provided in class). Use the editor to format your answerExplain the Net Operating Loss rules under Sec. 172 and how they were amended by the Tax Cuts and Jobs Act. How this amended section was further changed and amended by the CARES Act.
- Which of the following statements are TRUE? (i) Interest expense incurred on loan to purchase motor cars for salesmen’s use is deductible as the salesmen use the cars only for meetings with customers and suppliers.(ii) Expenses which qualify for special deduction under Section 14Q relates to capital expenditure which do not qualify for capital allowances claim.(iii) Companies can claim deduction of computer donations to institutions of public character up to 20/2/2017.The tax law requires that capital gains and losses be separated from other types of gains and losses. Among the reasons for this treatment are: a."Long-term capital gains may be taxed at a lower rate than ordinary gains" and "Net capital loss is deductible only up to $3,000 per year for individual taxpayers". b.Short-term capital losses are not deductible. c.Net capital loss is deductible only up to $3,000 per year for individual taxpayers. d.Long-term capital gains may be taxed at a lower rate than ordinary gains.The faster an asset can be depreciated, according to IRS rules, the greater a company's after-tax profits. Is this true or false?
- Instead of providing the qualified business income deduction to owners of noncorporate businesses, Congress could have applied a special tax rate to the business income to achieve a similar result. True FalseCongress chose to exempt certain income from taxation, such as scholarships, gifts, life insurance proceeds, and employee fringe benefits. Given the primary purpose of IRC is to raise revenue for the government, why do you think Congress would provide for these and other exceptions?Which of the following statements is true of corporations in 2021? Select one: a. Capital losses of a corporation may be deducted from ordinary income, subject to an annual limitation. b. A corporation may deduct organizational expenditures as they are incurred. c. If a corporation has a long-term capital loss that is carried back, it is treated as a short-term capital loss d. Income of all corporations is taxed in the same way that income of partnerships is taxed.
- 21. Before the passage of CREATE Law, which entity is not subject to improperly accumulated earnings tax a. Educational Institution b. Business Partnership c. Close Corporation d. Mining Corporation 22. Which of the following is not exempt from withholding tax on compensation? a. Payment or damages b. Remuneration for domestic services c. Overtime pay d. Retirement benefits received under RA 7641A net operating loss occurs when tax-deductible expenses exceed taxable revenues. Tax laws permit the net operating loss to be used to reduce taxable income in future profitable years. How are loss carryforwards recognized for financial reporting purposes?Which of the following expenses is least likely to be deductible under sec 8-1 of the Income Tax Assessment Act 1997?An amount of $250,000 paid for a feasibility study prior to the commencement of a business.Costs incurred on maintenance during a temporary cessation of production at a food processing plant.Costs incurred by a manufacturing business to rectify faults in products that it formerly produced, but has not produced for the past two years.Interest paid by a taxpayer on borrowings used to finance a business that was subsequently sold. The sale proceeds were insufficient to completely repay the borrowings.Costs of trading stock purchased by a retailer