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ACC 401 Week 1 Assignment Chapter 2 Problems 32, 33 & 38

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32) List the five types of filing status and briefly explain the requirements for the use of each one.

33) In which of the following cases may the taxpayer claim head of household filing status?

a. The taxpayer is single and maintains a household which is the principal place of abode of her infant son.

b. The taxpayer is single and maintains a household for herself and maintains a separate household which is the principal place of abode of her dependent widowed mother.

c. The taxpayer is married from January to October and lived with his spouse from January to May. From June 1 to December 31, the taxpayer maintained a household that was the principal place of abode of his married son and daughter-in-law whom the taxpayer can claim as dependents.

Same as (c) except the taxpayer lived with his ex-spouse until August and maintained the household for his married son and daughter-in-law from September 1 to the end of the year

38) Julio and Martina are engaged and are planning to travel to Las Vegas during the 2009 Christmas season and get married around the end of the year. In 2009, Julio expects to earn $45,000 and Martina expects to earn $15,000. Their employers have deducted the appropriate amount of withholding from their paychecks throughout the year. Neither Julio nor Martina has any itemized deductions. They are trying to decide whether they should get married on December 31, 2009 or on January 1, 2010. What do you recommend? Explain your answer (disregard the making work pay credit).

Chapter 3: Problems 35, 36, & 42

35) Determine the amount of taxable income that should be reported by a cash-basis taxpayer in 2009 in each of the following independent cases.

A taxpayer completes $500 of accounting services in December 2009 for a client who pays for the accounting work in January 2010.

A taxpayer is in the business of renting computers on a short-term basis. On December 1, 2009, she rents a computer for a $200 rental fee and receives a $500 deposit. The customer returns the computer and is refunded the deposit on December 20, 2009.

Same facts as (b) except that the computer is returned on January 5, 2010.

On December 18, 2009, a landlord rents an apartment for $700 per month and collects the first and last month’s rent up front. It is customary that tenants apply the deposit to their last month’s rent upon moving out.

An accountant agrees to perform $500 of tax services for an auto mechanic who has agreed to perform repairs on the car of the wife of the accountant. The mechanic repairs the car in December 2009 and the accountant starts and completes the tax work in March 2010.

36. A taxpayer who purchases a Series EE U.S. Savings Bond must report the interest income (i.e., increase in value) on the bond on the date the bond is redeemed or the taxpayer can elect to report the interest currently in income. Under what circumstances should a taxpayer report income at maturity? Under what circumstances is it more advantageous to report income currently?

42. Sean, who is single, received social security benefits of $8,000, dividend income of $13,000, and interest income of $2,000. Except as noted, those income items are reasonably consistent from year to year. At the end of 2009, Sean is considering selling stock which would result in an immediate gain of $10,000, a reduction in future dividends of $1,000, and an increase in future interest income of $1,500. He has asked you for advice. What course of action do you recommend​

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ACC 401 Week 1 DQ 1 Basic Concepts

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From Chapter 1, complete discussion questions 6, 9, & 10. From Chapter 2, complete discussion questions 3, 6, 9, & 10. Review Appendix E (2014 IRS Tax Forms) to see where dependents are shown on the tax return. Remember to complete all parts of the problems and report the results of your analysis. Do not forget to show the necessary steps and explain how you attained that outcome.

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ACC 401 Week 1 DQ 2 Gross Income

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From Chapter 3, answer discussion questions 1, 2, 3, 10, 12, & 15. Remember to complete all parts of the problems and report the results of your analysis. Do not forget to show the necessary steps and explain how you attained that outcome.

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ACC 401 Week 1 Quiz Set 2

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1. Question : What is the amount of the social security wage limitation for 2014?

2. Question : With respect to the income tax formula, which of the following statements is

3. Question : To be a qualifying child, the taxpayermust meet three general tests and five

specific tests. Which one is not part of the five specific tests?

4. Question : Which of the following would disqualify a taxpayer from filing a Form 1040EZ?

5. Question : The basic standard deduction in 2014 for a single taxpayer who is 67 years old

and not blind is:

6. Question : The basic standard deduction in 2014 for a taxpayer, 67 and not blind, filing head

of household is:

7. Question : What is the amount of the tax liability for a married couple having taxable income

of $153,500? All answers should be rounded to the nearest dollar.

8. Question : Which of the following trial courts hear tax cases?

9. Question : A 37-year-old taxpayer with a dependent child and claiming head of household

status has received $21,000 in child support payments and earned wages of

$46,000. Which is the simplest form this person canfile?

10. Question : The basic standard deduction in 2014 for a Head of Household taxpayer who is 41

years old and not blind is:

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ACC 401 Week 1 Quiz

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ACC 401 Week 1 Quiz

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ACC 401 Week 2 Assignment Chapter 4 problem 53 and problem 55

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53. Under the terms of a divorce decree executed May 1, 2008, Rob transferred a house worth $650,000 to his ex-wife, Linda, and was to make alimony payments of $3,000 per month. The property has a tax basis to Rob of $300,000.

a. How much of this must be reported on Linda’s tax return?

b. Of that amount, how much is taxable gain or loss that Linda must recognize related to the transfer of the house?

54. Under the alimony recapture rules, what amounts are designated for recapture reclassification, and what are the tax consequences?

55. Indicate whether each of the following items is considered a for AGI, (above-the line) deduction for the 2009 tax year.

Chapter 5, complete problem 54, problem 61, and problem 62

54. Steve purchased a personal residence from Adam. To sell the residence, Adam agreed to pay $4,500 in points related to Steve’s mortgage. Discuss the tax consequences from the perspective of both Steve and Adam.

61. Reynaldo and Sonya, a married couple, had flood damage in their home due to a faulty water heater during 2009, which ruined the furniture in their garage. The following items were completely destroyed and not salvageable

Their homeowner’s insurance policy had a $10,000 deductible for the personal property, which was deducted from their insurance reimbursement of $12,700, resulting in a net payment of $2,800. Their AGI for 2009 was $30,000. What is the amount of casualty loss that Reynaldo and Sonya can claim on their joint return for 2009?

62. During the year 2009, Ricki, who is not self-employed and does not receive employer reimbursement for business expenses, drove her car 5,000 miles to visit clients, 10,000 miles to get to her office, and 500 miles to attend business-related seminars. She spent $300 for airfare to another business seminar and $200 for parking at her office. Using the car expense rate of 55 cents per mile, what is her deductible transportation expense?

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ACC 401 Week 2 DQ 1 Adjusted Gross Income

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38. What are some of the limitations concerning deductibility of student loan interest? Be specific and comprehensive

43. How much, if any, may Antonio take as a moving expense deduction on his 2014 tax return? Is that deduction subject to any conditions that could change its deductibility in the future?

47. Three types of payments are associated with a decree of separation or a divorce.

a. What are those three payments

b. Which one has a tax consequence

c. What is the timing rule regarding the recapture period of those payments

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ACC 401 Week 2 DQ 2 Itemized Deductions

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Ch5.

48. Mickey is a 12-year-old dialysis patient. Three times a week he and his mother, Sue, drive 20 miles one way to Mickey’s dialysis clinic. On the way home they go 10 miles out of their way to stop at Mickey’s favorite restaurant. Their total round trip is 50 miles per day. How many of those miles, if any, can Sue use to calculate an itemized deduction for transportation? Use the mileage rate in effect for 2010. Explain your answer.

52. On April 1, 2010, Paul sold a house to Amy. The property tax on the house, which is based on a calendar year, was due September 1, 2010. Amy paid the full amount of property tax of $ 2,500. Calculate both Paul’s and Amy’s allowable deductions for the property tax. Assume a 365 day year.

53. In 2009 Sherri, a single taxpayer, had $3,600 in state tax withheld from her paycheck. She properly deducted that amount on her 2009 tax return as an itemized deduction that she qualified for, thus reducing her tax liability. After filing her 2009 tax return, Sherri discovered that she had overpaid her state tax by $316. She received her refund in July 2010. What must Sherri do with the $ 316 refund? Explain your answer.

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ACC 401 Week 2 Quiz

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QUIZ 2

1) Henry graduated from university of Maryland in 2006, in 2009, to take advantage of lower interest rates, he refinanced his qualified education loans with another loan. He is not a dependent on another person’s tax return. What is the maximum deduction available to him for the $3,200 he paid for educational loan interest in 2009?

2) Which of the following interest expenses incurred by Amanda is treated as personal interest expense and, therefore not deductible as an itemized deduction?

3) Which of the following miscellaneous itemized deduction is not subject to the 2% of adjusted gross income limitation?

4) For the deduction of self-employment taxes, which of the following statements is correct?

5) Paola is a freshman in the UC-Davis degree program in veterinary medicine. In 2008, Paola paid $3,000 in tuition, $500 for books, and $250 for supplies for class. Paola also paid room and board of $3,500. What is the total qualifying education expense for education loan for Paola in 2007?

6) Which of the following costs are deductible on Form 1040, Schedule A, as taxes?

7) Which of the following miscellaneous deductions are subjected to the 2% of adjusted gross income limitation?

8) During 2009 Shakira paid the following expenses:

What is the total amount of medical expenses that would enter into the calculation of itemized deductions on Shakira’s 2009 income tax return?

9) The deduction for qualified tuition and related expenses included?

10) Maria files her tax return married filing separately. She has not lived with her husband for over two years. Beginning in January 2009, by court ordered decree, she paid her husband $600 per month as separate maintenance. For 2009, how much will she be able to deduct as alimony?

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ACC 401 Week 3 Assignment Chapter 6

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39. David is a college professor who does some consulting work on the side. He uses 25% of his home exclusively for the consulting practice. He is single and 63 years old. His AGI (without consideration of consulting income) is $45,000. Other information follows:

Income from consulting business $4,000

Consulting expenses other than home office 1,500

Total costs relating to home:

Interest and taxes 6,500

Utilities 1,500

Maintenance and repairs 450

Depreciation (business part only) 1,500

43. Janet purchased her personal residence in 2000 for $250,000. In January 2009 she converted it to rental property. The fair market value at the time of conversion was $210,000.

a. Determine the amount of cost recovery that can be taken in 2009:

b. Determine the amount of cost recovery that could be taken in 2009 if the fair market value of the property were $350,000:

Chapter 7

49. Ricardo acquired a warehouse for business purposes on August 30, 1992. The building cost $200,000. He took $133,333 of depreciation on the building, and then sold it for $350,000 on July 1, 2009. What is the amount and nature of Ricardo’s gain or loss on the sale of the warehouse?

51. In 2009, Juanita sold stock considered short-term for a gain of $875 and stock considered long-term for a loss of $2,400. She also had a $2,000 short-term loss carryover from 2008 and a $240 long-term loss carryover from 2008.

What amount will be shown as a short-term gain (loss) for 2009?
What amount will be shown as a long-term gain (loss) for 2009?

c. Will there be a carryover to 2010? If so, what is the nature and amount of the carryover?

Chapter 8

37. Matt and Marie own a vacation home at the beach. During the year, they rented the house for 42 days (6 weeks) at $890 per week and used it for personal use for 58 days. The total costs of maintaining the home are as follows:

Mortgage interest $4,200

Property taxes 700

Insurance 1,200

Utilities 3,200

Repairs 1,900

Depreciation 5,500

a. What is the proper tax treatment of this information on their tax return using the Tax Court

method?

b. Is there an option for how to allocate the expense between personal and rental use? Explain

c. What is the proper tax treatment if Matt and Marie rented the house for only 14 days?

8. Janet owns a condominium at the beach. She incurs the following expenses:

Mortgage interest $1,300

Property taxes 800

Insurance 1,500

Utilities 1,800

Repairs 300

Depreciation 4,000

What is the proper treatment of these expenses as applied to the following situations? Use the Tax Court allocation method, if applicable.

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ACC 401 Week 3 DQ 1 Self-Employed Business Income & Capital Gains

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Ch6.

1. Discuss the definition of trade or business. Why does it matter whether a taxpayer is classified as an employee or as self-employed?

2. Discuss the concepts of ordinary, necessary, and reasonable in relation to trade or business expenses.

9. Discuss the concept of electing §179 expense. Does the election allow a larger expense deduction in the year of asset acquisition?

15. Why were the hobby loss rules established? What factors determine whether an activity is a trade or business or a hobby? Is any one factor controlling?

Ch7.

1. How are the terms basis, adjusted basis, and fair market value defined as they apply to the calculation of gains and losses?

2. What is meant by the terms realized gain (loss) and recognized gain (loss) as they apply to the sale of assets by a taxpayer?

8. What are the different classifications of capital assets? Define each classification and explain the difference in the preferential tax treatment (the rate at which the gains are taxed).

12. How is a net capital loss treated? Include in your answer a discussion of how a net capital loss is treated in relation to other income.

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ACC 401 Week 3 DQ 2 Rental Property & Royalties

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Ch8.

33. Ramone is a tax attorney and he also owns an office building that he rents for $8,500 /month. He is responsible for paying all taxes and expenses relating to the building’s operation and maintenance. Is Ramone engaged in the trade or business of renting real estate?

34. Kelvin owns and lives in a duplex. He rents the other unit for $750 per month. He incurs the following expenses during the current year for the entire property:

How are the expenditures treated for tax purposes? On what tax form(s) are these amounts reported?

35. In the current year, Sandra rented her vacation home for 75 days, used it for personal use for 22 days, and left it vacant for the remainder of the year. Her income and expenses are as follows

What is Sandra’s net income or loss from the activity? Use the tax court method.

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ACC 401 Week 3 Quiz

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QUIZ 3

1) Which one of the following is Section 1231 property?

2) Which of the following expense items is (are) deductible as rental expense?

3) If an activity is considered a hobby, which of the following is true?

4) $179 expense is available for all of the following business assets except:

5) Brad and Kate receive $9,500 for rent from Mike and Janet, who are renting their home in Santa Ana, California. Brad and Kate do not use this property for personal use. The rent covers eight months from August 1 of the current year to March 31 of the following year. The amount also includes a security deposit of $1,500. How much should Brad and Kate report as rental income in the current tax year?

6) The adjusted basis of an asset is:

7) Samantha is a full-time author and recently published her 8th romance novel. The royalty income she receives from the publisher this year should be reported on what schedule?

8) Patrice sells a parcel of land for $50,000 cash and the buyer assumes Patrice’s liability of $7,000 on the land. Patrice’s basis in the land is $40,000. What is the gain or loss she will recognize on the sale?

9) Jane and Don own a Chalet in Lake Tahoe and rented it for 12 days for $8,000. The rest of year, the Chalet was used by them and their friends and family. What is the proper tax treatment of $8,000?

10) Renita purchased 500 shares in Prompt Messenger services for $12,000 on November 21, 2007. The company went bankrupt on June 13, 2008, with no hope of recovery for the shareholders. On what date is the stock deemed to be worthless and what is the nature of loss?

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ACC 401 Week 4 Assignment Chapter 9, Problem 42 problem 49

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42. Tim and Martha paid $7,900 in qualified employment-related expenses for their three young children who live with them in their household. Martha received $1,800 of dependent care assistance from her employer, which was properly excluded from gross income. The couple had $57,000 of AGI earned equally by Tim and Martha. What amount of child and dependent care tax credit can they claim on their Form 1040? How would your answer differ (if at all) if the couple had AGI of $36,000 that was entirely earned by Tim?

49. Jeremy and Celeste paid the following for their daughter, Alyssa, to attend University of Colorado, during 2009. Alyssa was in her first year of college and attended full-time:

Tuition and fees (for fall semester 2009) $1,950

Tuition and fees (for spring semester 2010)1,000

Books 600

Room and board 1,200 The spring semester at University of Colorado begins in January. In addition to the above, Alyssa’s uncle Devin sent $800 as payment for her tuition directly to the University. Jeremy and Celeste have modified AGI of $165,000. What is the amount of qualifying expenses for purposes of the Hope credit? What is the amount of Hope credit that Jeremy and Celeste can claim based on their AGI?Chapter 10, complete problem 49 and problem 57.

49. Allison is paid $500 per week. What is the amount of federal income tax withheld from Allison’s paycheck under the following conditions? Use the percentage method table in the appendix to this chapter.

a. Allison is single and claims three withholding allowances

b. Allison is married and claims three withholding allowances

c. Allison is single and claims one withholding allowance

57. Jones Company has the following employees on payroll:

Calculate the payroll for the last pay period in February. Include in your calculations federal withholding, FICA, and FUTA. Assume that Jones Company received the maximum credit for state unemployment taxes

Chapter 11, complete problem 49 and problem 52. Submit these items to your instructor.

49. Will, who is single and under age 50, is employed as a full-time tax accountant at a local manufacturing company where he earns $60,000 per year. He participates in a pension plan through his employer. Will also operates a small tax practice in his spare time during tax season and has net Schedule C income of $8,000. He is interested in establishing and contributing to other retirement plans. What options are available to Will?

52. Ken is a self-employed architect in a small firm with four employees: himself, his office assistant, and two drafters, all of whom have worked for Ken full-time for the last four years. The office assistant earns $30,000 per year and each drafter earns $40,000. Ken’s net earnings from self-employment (after deducting all expenses and one-half of self-employment taxes) are $305,000. Ken is considering whether to establish an SEP plan and has a few questions.

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ACC 401 Week 4 DQ 1 Tax Credits and Payroll Taxes

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From Chapter 9, complete questions 3 and 7, and problem 43. From Chapter 10, complete question 1 and question 7. Remember to complete all parts of the problems and report the results of your analysis. Do not forget to show the necessary steps and explain how you attained that outcome. Respond to at least two of your classmates’ postings.

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ACC 401 Week 4 DQ 2 Payroll Taxes and Retirement Plans

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From Chapter 10, complete questions 12 and 13. From Chapter 11, complete question 5, question 15, and question 19. Remember to complete all parts of the problems and report the results of your analysis. Do not forget to show the necessary steps and explain how you attained that outcome.

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ACC 401 Week 5 DQ 1 Partnership Taxation

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Chapter 14, problems 1, 3, 12, and 15.

1. Discuss the formation of a partnership. Is any gain or loss recognized? Explain.

3. How do taxation for the corporate form and taxation for the partnership form differ?

12. Can a partner have a salary from a partnership? Why? What is a guaranteed payment?

15. If a partner owns a 20% interest, does that necessarily mean that he or she will receive 20% of the net income from the partnership? Explain.

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ACC 401 Week 5 DQ 2 Corporate taxation

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Chapter 15, problems 4, 6, 14 and 16.

4.Explain the 80% rule as it pertains to the formation of a corporation.

6.An individual contributes property with a fair market value in excess of basis to a corporation in exchange for stock. What is the basis of the stock in the hands of the shareholder, and what is the basis of the property contributed in the hands of the corporation?

14.A corporation may make a distribution to its shareholders. Depending on the circumstances, in the hands of the shareholder, the distribution can be classified as a dividend, a tax-free distribution, or a capital gain. Explain the circumstances in which each classification can occur.

16.What is Schedule M-1, and what is its purpose?

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ACC 401 Week 5 Final Paper Assignment

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Q:Appendix A

Please use this information for your Tax Return and Paper.

*All people, businesses, and information are fictional. Any relation to an actual person or business is accidental.

Harold Petersan

SSN: 0XX-01–1XXX

Date of Birth (DOB): 05/27/1975

Gross Pay: $51,750

401(k) contributions: $4,140

Healthcare costs (payroll deductions): $1347

Reported wages: $46,263

Social Security Wages: $50,403

Medicare Wages: $50,403

State Wages: $46,263

Taxes withheld:

Federal: $2896.06

Social Security: $3124.99

Medicare: $730.34

State: $682.38

sdi (mandatory disability insurance): $393.24

Employer: PointMark, INC

Address: 1111 One Park Place

City: One City

State: California

Zip code: 11111

Employer’s FED ID number: 33–01XXX11

Sarah Petersan

SSN: 001–02-XXXX

DOB: 08/11/1979

Gross Pay: $50,000

401(k) contributions: $4,000

Healthcare costs (payroll deductions): $1347

Reported wages: $44,653

Social Security Wages: $48,653

Medicare Wages: $48,653

State Wages: $44,653

Taxes withheld:

Federal: $2795.28

Social Security: $3016.49

Medicare: $704.98

State: $658.63

sdi (mandatory disability insurance): $379.55

Employer: CompanyOne

Address: 1111 Place Road

City: One City

State: California

Zip code: 11112

Employer’s FED ID number: 33–01XXX22

Dependent:

Tara Petersan

SSN: 001-XX-XX00

DOB: 12/29/2004

Child Care Costs: $10,320

Child Care Provider: fabulous daycarecenter

Address: 121 Place Road

City: One City

State: California

Zip code: 11111

Identifying number: 33-XXXX011

Life Change Events

Home Sale:

Primary residence sale price $520,000

cost basis (incurred three years prior) $300,000

Property Tax paid: $1,500

Mortgage Interest paid: $14,400

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