SWFT Corp Partner Estates Trusts
42nd Edition
ISBN: 9780357161548
Author: Raabe
Publisher: Cengage
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Suppose Sam and Cory are married and are deciding whether to use the filing status of Single or of Married filing jointly. Cory has a taxable income of $50,000 and Sam has a taxable income of $100,000. If they both file as Singles, together, how much would they owe in federal income taxes?
Joe and Sunny intend to enter into a business venture together and decided that a corporation would be a desirable entity choice for federal income tax purposes. The corporation is named JS Inc. (“JS”). For newly established JS, Joe intends to contribute Property A with a fair market value (“FMV”) of $800 and basis of $300, subject to debt of $200. Sunny intends to contribute cash of $800. JS is elected to be treated as an S corporation for federal income tax purposes.
1. Provide Joe’s basis in JS upon contribution (i.e., Year 0) of Property A.
2. Provide Sunny’s basis in JS upon contribution (i.e., Year 0) of cash.
3. Provide JS’s basis in Property A and cash immediately after the contribution.
4. Assuming Joe’s and Sunny’s basis in the JS stock remain the same after the contributions for Year 1, determine Joe’s and Sunny’s basis when JS distributes $400 of cash to Joe and Sunny.
5. Assume the following: 1) there are no AAA, OAA, and AEP; 2) the debt of $200 is still treated as a loan…
Mackenzie is considering conducting her business, Mac561, as either a single member LLC or as an S corporation. Determine Mackenzie’s after-tax cash flow from the entity’s business income and any compensation she receives from the business assuming her marginal ordinary income tax rate is 37 percent, her marginal FICA rate on employee compensation is 1.45 percent, her marginal self-employment tax rate is 2.9 percent, and any employee compensation or self-employment income she receives is subject to the 0.9 percent additional Medicare tax. Finally, Mac561 generated $200,000 of business income before considering the deduction for compensation Mac561 pays to Mackenzie and Mackenzie can claim the full qualified business income deduction on Mac561’s business income. (Round your intermediate computations to the nearest whole dollar amount.)
a. Mackenzie conducted Mac561 as a single-member LLC.
A). After-tax cash flow $_________________
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- ASAP! A)If a married couple files separate returns, both must claim the standard deduction (rather than itemize their below-the-line deductions). B) Grace, age 16, is claimed as a dependent by her grandfather. During 2021, she had City of Baltimore bonds of $2,000 and earnings from cat-sitting of $400. Calculate her taxable income. You do not need to include the dollar sign, commas, or cents in your answer. C) In terms of income tax consequences, abandoned spouses who do not have children are treated the same way as married persons filing separate returns. T OR F?arrow_forwardWhich one of the following statements describes the consequences of using the filing status 'married filing jointly'? A spouse may not be held responsible for tax if that spouse had no income. The tax rates are generally more favorable than that of two single individuals if one has high income and the other has low income. If it is elected on an original return, it may be changed on an amended return.arrow_forwardIn 2023, Lisa and Fred, a married couple, had taxable income of $412,600. If they were to file separate tax returns, Lisa would have reported taxable income of $231,300 and Fred would have reported taxable income of $181,300. Use Tax Rate Schedule for reference. What is the couple's marriage penalty or benefit? Note: Do not round intermediate calculations. Marriage benefit Carrow_forward
- Is this statement True or False? Pat and Shane are a married couple (filing jointly) and operate a small restaurant together as an unincorporated business. They have never filed any formal paperwork with the state as a business entity. Pat and Shane’s business is a partnership for Federal tax purposes.arrow_forwardSebastian and Sunny are married. They are currently contemplating filing as married filing separately. Under current law, spouses filing separately must A) use the standard deduction if the other spouse uses the itemized deductions or vice versa. B) both use standard deduction. C) both use itemized deductions. D) either both use itemized deductions, or both use standard deduction.arrow_forwardBrowne and Red, both C corporations, formed the BR Partnership on January 1, 2020. Neither Browne nor Red is a personal service corporation, and BR is not a tax shelter. BR’s gross receipts were $22,000,000, $28,000,000, $34,000,000, and $36,000,000, respectively, for 2020 to 2023. Describe the methods of accounting available to BR in each tax year.arrow_forward
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