SWFT Individual Income Taxes
43rd Edition
ISBN: 9780357391365
Author: YOUNG
Publisher: Cengage
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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.
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.
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?
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- 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_forwardAlexa owns a condominium near Cocoa Beach in Florida. In 2023, she incurs the following expenses in connection with her condo: Insurance $ 2, 050 Mortgage interest 7, 450 Property taxes 4, 200 Repairs & maintenance 650 Utilities 4, 650 Depreciation 23, 700 During the year, Alexa rented out the condo for 137 days. Alexa's AGI from all sources other than the rental property is $200,000. Unless otherwise specified, Alexa has no sources of passive income. Assume that in addition to renting the condo for 137 days, Alexa uses the condo for 8 days of personal use. Also assume that Alexa receives $47, 750 of gross rental receipts, her itemized deductions exceed the standard deduction before considering expenses associated with the condo, and her itemized deduction for non-home business taxes is less than $ 10,000 by more than the real property taxes allocated to rental use of the home. Answer thearrow_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
- If 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_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_forwardA 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_forward
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