a.
Determine if the tax position of the taxpayer change in the given situation or not.
a.
Explanation of Solution
What is Tax: A tax is a payment levied by the order of Federal, state or local government agencies and collected from the general public to fund the developmental work of the government and not directly linked to the benefits received by the public. A tax must have following characteristics;
- 1. Tax is mandatory payment from the eligible public/enterprise
- 2. Tax is levied by the Government agencies
- 3. Tax has no direct relationship with the benefit received by the taxpayer
Yes, the tax positon for J would change in this situation. J must recognize the rental income and segregate the expenses for personal use and rental use, since J may have to pay transient occupancy tax.
b.
Determine if the tax position of the taxpayer change in the given situation or not.
b.
Explanation of Solution
Yes, the tax position of T would change. T become a self-employed and may have to pay quarterly tax on estimated income and self-employment tax. If she employs any staff members, she may have to withhold payroll tax from her employees and deposit it with the government.
c.
Determine if the tax position of the taxpayer change in the given situation or not.
c.
Explanation of Solution
Yes, the tax position of P would change. The employer of P is entitled deductions for the moving expenses incurred by P but P cannot claim that deduction. P may not be subject to personal income tax in F that was taxable in C.
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Chapter 1 Solutions
South-Western Federal Taxation 2019: Individual Income Taxes (Intuit ProConnect Tax Online 2017 & RIA Checkpoint 1 term (6 months) Printed Access Card)
- Monica, a self-employed taxpayer, travels from her office in Boston to Lisbon, Portugal, on business. Her absence of 13 days was spent as follows: a. For tax purposes, how many days has Monica spent on business? b. What difference does it make? c. Could Monica have spent more time than she did vacationing on the trip without loss of existing tax benefits? Explain.arrow_forwardSerena operates a gift shop. To reduce costs of credit card transactions, she offers customers a discount if they pay in cash. For the holiday rush, she hires some short-term workers but pays them cash and does not add them to the payroll. a. What are some of the tax problems Serena might have? b. Assess Serenas chances of audit by the IRS.arrow_forward
- Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT