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Tim receives a $25,000 gift from his parents for a down payment on a house. They know he cannot buy a house without their help. They write “gift” in the memo line of the check. How much of the gift is taxable to Tim?
In your response, please make sure to take all of the facts above into consideration. You can refer back to the text, lecture videos, and the IRS website. Please make sure to support whatever conclusion you decide to present.
According to IRS, as per the annual gift consideration anybody can give a gift up to $15000 and the amount exceed $15000 is considered to be filed as a gift tax return under IRS Form 709.
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- Search the code and cases to find an answer to your hypothetical's situation. List the relevant Internal Revenue Code, regulations, revenue rulings, and/or case(s) that you used in making your determination. Would Fred be able to claim $320 charitable deduction? This year Fred Brown’s church had a raffle for a flat-screen TV at their annual fundraiser. Fred attended and purchased twenty $1 raffle tickets and wrote a check for $300 to the church. Fred plans on claiming $320 for a charitable deduction to his chur chch1. Bonnie receives salary income of $32,000, unemployment compensation of $4,400, and interest income of $1,200 and a gift of $7,000 in cash from her aunt. How much gross income does Bonnie have?In your response, please make sure to take all of the facts above into consideration. You can refer back to the text, lecture videos, and the IRS website. Please make sure to support whatever conclusion you decide to present.2. This next question will be more opinion-based. The United States operates utilizes a progressive tax system. What exactly does this mean? Do you believe it is the best system for the United States or this is there a better answer (one additional choice could be a flat tax for example)? Please try to explain your thoughts as thoroughly as possible.Your initial post will be due Wednesday February 3, 2021 with follow up posts to at least two classmates due Sunday February 31, 2021Jake is an IRS tax law - certified volunteer preparer at a VITA/TCE site. When preparing a return for Jill, Jake learns that Jill does not have a bank account to receive a direct deposit of her refund. Jill is distraught when Jake tells her the paper refund check will take three to four weeks longer than the refund being direct deposited. Jill asks Jake if he can deposit her refund in his bank account and then turn the money over to her when he gets it. What should Jake do?
- During 2020, Jackie sent her brother Junnie $2,500 via a telegraphic transfer through El Banco Prieto. The bank’s remittance clerk made a mistake and credited Junnie with $250,000 which he promptly withdrew. The bank demanded the return of the mistakenly credited excess, but Junnie refused to do so. The BIR entered the picture and investigated Junnie. Would the BIR be correct if it determines that he earned a taxable income under the facts? No, it was not her fault that the funds in excess of $2,500 were credited to him. Yes, income is a taxable income regardless of the source No, he had no income because he had no right to the mistakenly credited funds. No, the funds in excess of $2,500 were in effect donated to her.Your client was the beneficiary of an annuity contract purchased by her stepmother. When the stepmother died, the insurance company paid the client $400,000 and sent her a Form 1099 indicating that the taxable portion (i.e., the amount in excess of the investment in the contract) was $50,000. However, according to the client, her father fraudulently convinced her that he was the intended beneficiary. She gave her father a check equal to the amount she had received from the insurance company. She did not report any of the annuity proceeds in her income tax return. She later discovered the fraud and filed a lawsuit to collect from her father. The IRS has examined your client’s return and has taken the position that she must include the $50,000 in her gross income. Evaluate the IRS’s position.T uses frequent flyer miles to take his family on a vacation. T received the miles duringbusiness travel paid for by his employer. The normal airfare for his vacation wouldhave cost $7,000.a. T must realize and recognize $7,000 as income.b. Although T has realized income, he will not be required to recognize it becausethe IRS has chosen, as a matter of administrative convenience, not to requiretaxpayers to recognize the value of frequent flyer tickets earned duringemployer-paid travel.c. Had T earned the frequent flyer miles during travel he had paid for himself, theissue of income realization and recognition would not arise.d. Both (a) and (c) are correct.e. Both (b) and (c) are correct. T buys a parcel of real estate for $100,000, which he finances by giving the seller a nonrecoursemortgage for the full purchase price. The debt is due in one balloon payment inYear 5. When the debt becomes due in Year 5, T decides to give the property back to theseller in satisfaction of the debt…
- Craig commits fraud on his tax return. It is found that he was $40,000 deficient in his tax because of the fraud. What would his penalty be? Please show all calculations to demonstrate how you arrived at your answer. In your response, please make sure to take all of the facts above into consideration. You can refer back to the text, lecture videos, and the IRS website.Your clients’ religious faith moves them to send their kids to a religious private school, and they pay $15,000 per year per kid to do so. Of course now they’re sitting across the desk from you, their CPA, asking how much of that total they can deduct on Schedule A as a charitable contribution. Important (???): By way of prefacing this loaded question, your clients inform you in no uncertain terms that they know “some Catholic people” who send their kids to Catholic school and “they don’t pay any tuition at all except for what they drop into the collection plate each week, and they deduct every penny of that on their tax returns every year, which we know for a fact because they had a couple of beers at a neighborhood block party and then started bragging about it!” All of this duly and soberly considered, your advice to these clients? Note: Assume, if relevant, that half of each school day is devoted to general studies, the other half to religious studies.For each of the following scenarios, determine if the event is included or excluded from gross income. In addition, you must also explain the reason for your decision. A father gives his son $10,000 so that he can purchase a car. A family member receives $3,000 from a friend after your house was destroyed by fire. A client gives her attorney an extra $500 because he did an excellent job preparing her will. An employer gave an employee an iPad because he has not been absent from work for three weeks. A spouse died three weeks ago, and her employer gave the spouse’s children $2,000. An uncle died and left his neighbor $40,000 in cash and a car worth $22,000.
- [The following information applies to the questions displayed below.j Calvin reviewed his canceled checks and receipts this year (2023) for charitable contributions, which included an antique painting and IBM stock. He has owned the IBM stock and the painting since 2005. Donee Hobbs Medical Center State Museum A needy family United Way Item IBM stock Antique painting Food and clothes Cash Charitable contribution deduction Carryover Calculate Calvin's charitable contribution deduction and carryover (if any) under the following circumstances. Note: Leave no answer blank. Enter zero if applicable. Cost $ 9,400 7,200 840 52,000 d. Calvin's AGI is $320,000 and Hobbs is a private nonoperating foundation. $ $ FMV $ 66,000 4,320 500 52,000 66,000Ralph has a $130,000 IRA with Red Investments. For personal reasons, he decides to move his funds to Blue Investments. He requests that his funds be distributed to him on August 20, 2018. What amount will Ralph receive from Red Investment? What is the last day Ralph can deposit the funds from Red Investments and avoid taxation in the current year? If the funds were distributed from a qualified retirement plan (not an IRA), how much would Ralph receive? Assuming the funds were distributed from a qualified retirement plan, not an IRA, how much will Ralph have to contribute to Blue Investments to avoid taxable income and any penalties?Charlie and Joan Smith filed their 2013 tax return and claimed $25,000 charitable deduction on their tax return. Charlie had a copy of cancelled check from the Church. Charlie also had a receipt from the Church which stated-Thank you for your generous donation of $25000. The taxpayer was audited for 2013 and IRS denied the deduction. Help Charlie to resolve this issue. Discuss why taxpayers lost the deduction based on the IRS code section. IRS Publication and court case. Discuss court case Durden in detail Question 1. Why were the taxpayer denied Deduction Question 2. What code section applies to charitable contribution. Copy this code section either from Google or court case Question 3. Why were the taxpayer denied deduction for the second time? Hint: contemporaneous
