SWFT Individual Income Taxes
43rd Edition
ISBN: 9780357391365
Author: YOUNG
Publisher: Cengage
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Students have asked these similar questions
If Bob takes an improper deduction for
$10,000 by mistake because he
misunderstood the tax law, and Jane
knowingly takes a $10,000 improper
deduction because she thinks the IRS will not
catch it, then should the two taxpayers be
treated differently?
If your answer is yes that Bob should not be
viewed as a tax evader, then what is stopping
Jane from asserting ignorance if she is
caught?
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.
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.
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- In choosing between taking the standard deduction and itemizing deductions from AGI, what effect, if any, does each of the following have? a. The age of the taxpayer(s). b. The health (i.e., physical condition) of the taxpayer. c. Whether taxpayers rent or own their residence. d. Taxpayers filing status (e.g., single, married, filing jointly). e. Whether married taxpayers decide to file separate returns. f. The taxpayers uninsured personal residence was recently destroyed by a wildfire (the region was declared a disaster area by the Federal government). g. The number of dependents the taxpayer can claim.arrow_forwardIf Mrs A worked at a jewellery store and her employer gave her a sales bonus of a diamond ring valued at $10,000 how would you treat this for taxation purposes? Briefly explain making reference to any relevant case law.arrow_forwardAs indicated by IRS, when an individual has more than one area of business, including home, for a solitary business. At that point the chief business environment is equipped for the deducting the costs of home possessed or leased. According to question taxpayer can write off the expenses of Condominium house taken on rent as the principal place of business is Condominium. House expenses of Sarasota house are not deductible.arrow_forward
- A taxpayer bought a second-hand vehicle for $12,000 in August 2023 and sold it for $14,000 in April 2024. Which of the following statements is correct?Question 19Answera.Unless the taxpayer is a trader, the gain is ordinary income.b. The taxpayer is liable for capital gains as the vehicle is a personal use asset.c. A vehicle is specifically exempt under capital gains provisions.d. The vehicle is not a personal use asset if purchased for less than $20,000.arrow_forwardTim 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.arrow_forward45. Michelle lives in a state that allows use of a beneficiary deed to transfer property at death. She owns her home in her sole name. She wants this asset to go to Bertram, her only child, at her death. Which one of the following is a correct statement regarding use of a beneficiary deed in this situation? A) A beneficiary deed can only transfer personal property at death. B) She will incur gift tax if she records the deed. C) If she uses a beneficiary deed, she will not be able to live in the house until her death. D) If Bertram predeceases her, Michelle will be able to name another beneficiary to receive title to the home at her death.arrow_forward
- For tax year 2019, the IRS assesses a deficiency against David for $500,000. a. Disregarding the interest component, enter David's penalty if the deficiency is attributable to negligence: $fill in the blank 00862dfde01c05d_1. b. Disregarding the interest component, enter David's penalty if the deficiency is attributable to civil fraud: $fill in the blank c83f71023f93fbc_1.arrow_forwardErin's bank foreclosed on her office building when she stopped making payments on her loan. The loan was secured by the building when she purchased it three years ago for $750,000. Erin's Form 1099-A is shown below. If the building is sold for the fair market value (FMV), how much of Erin's personal assets can the lender attempt to collect to satisfy the judgment? (Answer choices are below the image.) LENDER'S name, street address, city or town, state or province, country, ZIP or foreign postal code, and telephone no. OAK RIDGE BANK 301 AUSTIN STREET YOUR CITY, YS XXXXX (XXX) 555-5678 LENDER'S TIN XX-XXXXXXX BORROWER'S name ERIN HERNANDEZ Street address (including apt. no.) 308 VIRGINIA AVENUE CORRECTED (if checked) BORROWER'S TIN XXX-XX-XXXX Account number (see instructions) XXXXXXXX Form 1099-A (Rev. 1-2022) City or town, state or province, country, and ZIP or foreign postal code YOUR CITY, YS XXXXX (keep for your records) $615.000 $595,000 $20,000 OSO (None of Erin's personal…arrow_forward
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