Individual Income Taxes
43rd Edition
ISBN: 9780357109731
Author: Hoffman
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Chapter 18, Problem 20DQ
To determine
Explain the mechanism to be used by N to correct the overpayment of tax in 2019.
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3. Mr. So filed his 2022 income tax return on June 30, 2023. The BIR discovered a deficiency income tax on August 15, 2024. When should the deficiency tax assessment be served?
a. On or before August 15, 2027
b. On April 15, 202
c. On or before June 30, 2026
d. On or before April 15, 2026
Mani Pakyaw failed to file and pay his income tax return for the year 2019 which should have been filed on or before April 15, 2020. The BIR sent him a notice to file his return and pay his tax on or before July 18, 2020. Mani Pakyaw filed a return showing a basic tax due of P1,000,000.
Compute the following:
Surcharge
Interest
Compromise
Total amount paid
Which of the following statements is incorrect?
Assume that the rental activity is classified as ‘production-of-income.’ If the taxpayer sells the rental property later at a loss, the loss will be treated as a capital loss (i.e., $3,000/$1,500 deduction limit in the current year).
An amount that would have been paid in an arm’s-length transaction is considered a reasonable amount as deduction.
Payment (except for medical or educational expense) of another person’s obligation does not result in a tax deduction for the payer.
Regarding the start-up costs, if the new business is in the same line of business as the existing one and if the new business is not launched, then none of the start-up costs are deductible.
Payments for a speeding ticket are nondeductible.
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Chapter 18 Solutions
Individual Income Taxes
Ch. 18 - Prob. 1DQCh. 18 - Prob. 2DQCh. 18 - Prob. 3DQCh. 18 - Prob. 4DQCh. 18 - Prob. 5DQCh. 18 - Prob. 6DQCh. 18 - Prob. 7DQCh. 18 - LO.2 In 2019, the taxpayer became ineligible to...Ch. 18 - LO.2 Osprey Corporation, an accrual basis...Ch. 18 - Prob. 10DQ
Ch. 18 - Prob. 11DQCh. 18 - Prob. 12DQCh. 18 - LO.2 Emerald Motors is an automobile dealer. The...Ch. 18 - Prob. 14DQCh. 18 - Prob. 15DQCh. 18 - Prob. 16DQCh. 18 - Prob. 17DQCh. 18 - LO.4, 7 In December 2019, Carl Corporation sold...Ch. 18 - LO.2, 5 What are the similarities between the crop...Ch. 18 - Prob. 20DQCh. 18 - Prob. 21DQCh. 18 - Prob. 22DQCh. 18 - LO.6 Largo Company is an engineering consulting...Ch. 18 - Prob. 24DQCh. 18 - Prob. 25DQCh. 18 - Prob. 26DQCh. 18 - Prob. 27CECh. 18 - LO.2 Gaffney Corporation is a wholesale...Ch. 18 - Prob. 29CECh. 18 - LO.2 In 2019, Chaya Corporation, an accrual basis,...Ch. 18 - Prob. 31CECh. 18 - Prob. 32CECh. 18 - Prob. 33CECh. 18 - Prob. 34CECh. 18 - Prob. 35CECh. 18 - Prob. 36CECh. 18 - Prob. 37CECh. 18 - Prob. 38CECh. 18 - Prob. 39PCh. 18 - Prob. 40PCh. 18 - Prob. 41PCh. 18 - In 2018, Juan entered into a contract to write a...Ch. 18 - Prob. 43PCh. 18 - Compute Marys income or deductions for 2019 using...Ch. 18 - What accounting method (cash or accrual) would you...Ch. 18 - Blue Company, an architectural firm, has a...Ch. 18 - How do the all events and economic performance...Ch. 18 - Ross Company is a C corporation providing property...Ch. 18 - Prob. 49PCh. 18 - Prob. 50PCh. 18 - Floyd, a cash basis taxpayer, has received an...Ch. 18 - Prob. 52PCh. 18 - Prob. 53PCh. 18 - On June 30, 2019, Kelly sold property for 240,000...Ch. 18 - Prob. 55PCh. 18 - Prob. 56PCh. 18 - Prob. 57PCh. 18 - Prob. 58PCh. 18 - Prob. 59PCh. 18 - Ostrich Company makes gasoline storage tanks....Ch. 18 - Prob. 61PCh. 18 - Grouse Company is a furniture retailer whose...Ch. 18 - Lavender Manufacturing Company began business in...Ch. 18 - Silver Creek Ranch LLC is a small, family-owned...Ch. 18 - In 2019, Gail changed from the lower of cost or...Ch. 18 - At the end of 2020, Magenta Manufacturing Company...Ch. 18 - Prob. 67PCh. 18 - Prob. 68PCh. 18 - Prob. 69PCh. 18 - Prob. 1RPCh. 18 - Prob. 2RPCh. 18 - Prob. 3RPCh. 18 - Paula has sales that qualify to be reported on the...
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- 19. Miss Barakah is the owner of Mini Market Barakah. She has prepared financial statements for the year ending 31 December 2022. Why does she need to prepare financial statements? A Ensure that the investment was used optimally B Attracting new investors to invest C Determine the amount of taxable income. D Allow bonus claims and salary increments to be made 20. Information below relates to Mr. Azrex who needs a financial statement. I need a financial statement to make an assessment of whether to grant or renew a credit facility. Who is Mr. Azrex? A Competitor B Investor C Owner D Supplier 21. Adrian Sdn. Bhd. supplies shirts to boutiques across the country. This company incurs fixed costs amounting to RM300,000. The selling price of a shirt is RM180 and the variable cost of a shirt is RM95. How many shirts should be sold to ensure that the company does not incur losses? A 1,091 B 1,667 C 3,158 D 3,530arrow_forwardRequired: Determine Paul's net income for tax purposes for the year ended December 31, 2021 by dragging the best option and dropping it in the empty box for each item. For each item, if there is an amount that should be included into income, you will select the best numerical response and drag/drop into the empty box. If there is no amount to include into income for an item, then you would drag the "NIL" option into the empty box. 1. Paul works for a large Canadian Public Company. His salary is $161,000. During the year his employer transferred him from Vancouver to Toronto. Details of his move are below. 2. Paul's employer withheld the following amounts from his income: Federal Income Tax Employment Insurance Premiums Canada Pension Plan Contributions Union dues 16,000 Interest incurred 890 3. He was granted 2,000 options in January 2021 at an option price of $20. At the time the options were granted, the shares were trading at $18/share. When Paul exercised all his options in July…arrow_forwardTo better understand the rules for offsetting capital losses and how to treat capital losses carried forward, analyze the following data for an unmarried individual for the period 2018 through 2021. No capital loss carryforwards are included in the figures. Requirement For each year, determine AGI and the capital losses to be carried forward to a later tax year. (If an input field is not used in the table leave the input field empty; do not enter a zero. Enter loss amounts as a positive number.) AGI (excluding property transactions) $ 55,000 STCG 2,500 STCL 9,500 CO LTCG 7,250 6,250 AGI (including property transactions) LTCL 2018 STCL to be carried forward LTCL to be carried forward []arrow_forward
- To better understand the rules for offsetting capital losses and how to treat capital losses carried forward, analyze the following data for an unmarried individual for the period 2018 through 2021. No capital loss carryforwards are included in the figures. Requirement For each year, determine AGI and the capital losses to be carried forward to a later tax year. (If an input field is not used in the table leave the input field empty; do not enter a zero. Enter loss amounts as a positive number.) AGI (excluding property transactions) STCG STCL LTCG LTCL AGI (including property transactions) STCL to be carried forward LTCL to be carried forward $ 2018 48,000 2,750 10,750 6,750 4,500arrow_forwardHow do the all events and economic performance requirements apply to the following transactions by an accrual basis taxpayer? a. The company guarantees its products for six months. At the end of 2019, customers had made valid claims for 600,000 that were not paid until 2020. Also, the company estimates that another 400,000 in claims from 2019 sales will be filed and paid in 2020. b. The accrual basis taxpayer reported 200,000 in corporate taxable income for 2019. The state income tax rate was 6%. The corporation paid 7,000 in estimated state income taxes in 2019 and paid 2,000 on 2018 state income taxes when it filed its 2018 state income tax return in March 2019. The company filed its 2019 state income tax return in March 2020 and paid the remaining 5,000 of its 2019 state income tax liability. c. An employee was involved in an accident while making a sales call. The company paid the injured victim 15,000 in 2019 and agreed to pay the victim 15,000 a year for the next nine years.arrow_forward
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