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Greg has lost interest in tax-deferment strategies and craves immediate tax relief. This tax advisor points out to Greg that he is eligible for tax credits, which would immediately help him out, since they would:
John operates a business and wants to hire more employees using the work opportunity credit (assuming Congress extends the provision) to reduce his costs. His advisor explains that, to get the §51 work opportunity credit, a new worker must be certified by a designated local agency as being:
Mel, who owns some older buildings, consults with his advisor on using the rehabilitation tax credit to renovate a building. Although not a certified historic structure, Mel’s advisor should explain that a 10% tax credit is also available for other qualified buildings if they were initially put in service:
When she filed her federal income taxes, Anne was able to qualify for a tax credit under §42 because she recently purchased:
Sherry is a single mother who works full-time. She has a 7-year old daughter, qualifying her for a §21 childcare credit. However, in order to claim this credit, whose name, address, and taxpayer ID number must she supply?
Tom and Mandy are claiming a deduction for several types of interest, but, when it comes time to file their federal income taxes, their tax advisor informs them that they are not allowed to take a deduction for:
During their meeting, Glen asks his advisor for an example of personal interest. His accountant should explain that, under §163(h)(1), the kind of item most likely to be deemed personal interest would be interest incurred from:
During the most recent tax year, Alice paid interest on a loan apportioned to some investment property she had purchased. Under §163(d), she was able to claim a deduction for the investment interest expense she had paid up to the amount of her:
Warren prepaid the interest on a loan he received to finance the acquisition of some property. He must now capitalize such interest and deduct it over the loan period to which it applies and to the degree it corresponds to the cost of:
Jerry used accelerated depreciation on his car in the previous tax year, and does not want to bother with the extensive record keeping the method requires. However, he is dismayed to learn from his tax advisor that he is disallowed from switching from the actual-cost method to the:
Kris is a self-employed environmental engineering consultant and uses a second car for extensive travel around Wyoming. She deducts her business-related auto expenses. When she files her federal income taxes, she would need to report these deductions using:
Albert wants to claim itemized transportation expenses for several trips he took to Seattle to receive medical care during the tax year. You should point out that this deduction is subject to:
Fred is restarting a tree trimming service he operated years ago from his home. Previously, R.R. 90-23 controlled the tax treatment of his transportation expenses but, this ruling has been superseded. Under R.R. 90-23, since Fred had a regular place of business, how were expenses incurred for transportation between Fred’s home and a temporary work location treated?
J & C Equipment Co. puts on and pays for an annual picnic for its employees at a state park in July of each year, where employees can engage in such activities as canoeing and hiking. Under §274, these costs treated would be treated as:
Duane hopes to “write off” some computers and a pickup truck used in his landscaping business. His tax advisor explains to him that these assets could be expensed under §179 since they included recovery property that was purchased and:
Maria is explaining to her client who wants to claim a §172 net operating loss (NOL) that, generally, such a loss can be produced by a loss from operating a sole proprietorship or from a casualty loss on business or personal use property. However, her client states he has neither. Maria should point out that an NOL can also be claimed in the event of a:
Ernesto is a California vintner who wishes to consider income-splitting strategies to lower his tax rate. He has listed several possible devices to accomplish this. However, which should most likely be excluded from his income-splitting list?
Andy is employed by a construction firm and has incurred some business expenses purchasing tools and other items related to his work. He would like to deduct these expenses. However, since he is an employee, Andy would itemize his business expenses but:
Under §280A, Jenny is able to deduct home office expenses to the extent of her business’s gross income minus regular operating expenses and the allocable portion of her mortgage interest and property taxes. However, she is also permitted to reduce gross income by:
Lenny’s auto glass business suffered extensive damage when a mile-wide tornado devastated his town in Minnesota. Under §165, which of the following would apply after itemizing his losses from the storm?
Frank lent his brother a large sum of money but, because of his brother’s bankruptcy, the debt is now worthless and uncollectible. How much may Frank deduct for this personal bad debt?
Sam incorporated a manufacturing company. In its capitalization, the corporation exchanged some property for stock. When he met with his advisor, Sam learned the exchange could be a nontaxable exchange of property for stock under:
During the finance class Sarah teaches, a student asks for an explanation of the General Utilities doctrine. Sarah responded that the General Utilities doctrine refers to the nonrecognition treatment formerly accorded liquidating as well as nonliquidating distributions to shareholders. However, what else was subject to this doctrine?
Simon is trying to decide whether to organize his business as an S corporation or a C corporation and meets with his tax advisor to discuss the decision. His advisor explains that if Simon organized as an S corporation, his business would be taxed like a:
Simon asks whether shareholders in an S corporation can receive distributions as in a C corporation. His tax advisor informs him that they can but, the difference is that when an S corporation distributes its profits to shareholders, they would:
Paul, Wes, and Lorene formed a partnership and purchased a newspaper in southwestern Minnesota. Therefore, when the business files its required federal income tax return, it would need to use:
Marius owns several large investments and, after considering his options, decides it is to his advantage to form a family partnership because this kind of partnership can be used to minimize:
Marius specifically wants to use a family partnership to shift investment income to his minor children. However, his advisor tells him that he should consider the impact of:
Stuart’s daughter has entered college and he cashed in several U.S. savings bonds, 15 years ago, to pay for her education. Under §135, how would the qualified interest on these savings bonds be treated?
Floyd moved to Oregon to work for his father-in-law’s small business and purchased a new home in Portland. A year later, his father-in-law unexpectedly died and Floyd wants to sell the home and return to California. Floyd’s tax advisor believes Floyd has a good chance for a prorated §121 exclusion, since the exclusion is available if Floyd fails to meet the §121 requirements due to a change in health, location of employment, or:
It has been a year packed with a variety of events for Arnold and he has sold his home and relocated. Examining the list below, his tax advisor is of the opinion that Arnold came under §121 safe harbor regulations when he:
Tina is receiving payments from Bob under a divorce decree or separation agreement. However, she learns that these payments constitute something other than alimony because:
Vernon received some property from his elderly father and inquires about the tax treatment of the gift. His advisor states that property received as a gift would:
Mary is employed by Oregon State University as a full-time research associate in the College of Forestry. Under her health plan, she is reimbursed for medical and dental expenses, which, according to §105 or §106, would be:
Deaconess Hospital offers its employees lunch in their cafeteria at cost as part of their compensation package. This part of their compensation package would be considered a:
Thompson Tool & Die employs 100 full time workers and its welfare plan is uninsured but self-funded. Given this, Thompson Tool & Die would be subject to many requirements under ERISA, one of which would be that:
At an in-house seminar on business strategies and devices, a staff member expresses confusion about accountable and nonaccountable plans. You should explain that accountable and non-accountable plans are two basic types of: