Posted: December 20th, 2021

ACC/547 Week 2 Problem Set

ACC/547 Week 2 Problem Set

Problem
72 (Ch. 2)
Latrell recently used his Delta
Skymiles to purchase a free roundtrip ticket to Milan, Italy (value $1,200).
The frequent flyer miles used to purchase the ticket were generated from
Latrell’s business travel as a CPA. Latrell’s employer paid for his business
trips, and he was not taxed on the travel reimbursement. Use an available tax
research service to determine how much income, if any, does Latrell have to
recognize as a result of purchasing an airline ticket with Skymiles earned from
business travel.

Problem
49 (Ch. 3)
Bendetta,
a high-tax-rate taxpayer, owns several rental properties and would like to
shift some income to her daughter, Jenine. Bendetta instructs her tenants to
send their rent checks to Jenine so Jenine can report the rental income. Will
this shift the income from Bendetta to Jenine? Why or why not?

Comprehensive Problem 40 (Ch. 4)
Marc and Michelle are married and
earned salaries this year (2009) of $64,000 and $12,000, respectively. In
addition to their salaries, they received interest of $350 from municipal bonds
and $500 from corporate bonds. Marc and Michelle also paid $2,500 of qualifying
moving expenses, and Marc paid alimony to a prior spouse in the amount of
$1,500. Marc and Michelle have a 10-year-old son, Matthew, who lived with them
throughout the entire year. Thus, Marc and Michelle are allowed to claim a
$1,000 child tax credit for Matthew. Marc and Michelle paid $6,000 of
expenditures that qualify as itemized deductions and they had a total of $5,500
in federal income taxes withheld from their paychecks during the course of the
year.
a.What
is Marc and Michelle’s gross income?

b.What
is Marc and Michelle’s adjusted gross income?
c.What
is the total amount of Marc and Michelle’s deductions from AGI?
d.What
is Marc and Michelle’s taxable income?

e.What
is Marc and Michelle’s taxes payable or refund due for the year (use the tax
rate schedules)?

Comprehensive Problem 41 (Ch. 4)

Demarco and Janine Jackson have been married for 20 years and have four children
who qualify as their dependents. Their income from all sources this year (2009)
totaled $200,000 and included a gain from the sale of their home, which they
purchased a few years ago for $200,000 and sold this year for $250,000. The
gain on the sale qualified for the exclusion from the sale of a principal
residence. The Jacksons incurred $16,500 of itemized deductions.

b. What would their taxable income be
if their itemized deductions totaled $6,000 instead of $16,500?

c. Assume the
same facts as in part b. except that the Jackson’s report $6,000 of for AGI
deductions and $0 itemized deductions. What is the Jackson’s taxable income?

d. Assume the
original facts except that they also incurred a loss of $5,000 on the sale of
some of
their investment
assets. What effect does the $5,000 loss have on their taxable income?

e. Assume the
original facts except that the Jacksons owned investments that appreciated by
$10,000 during the year? The Jacksons believe the investments will continue to
appreciate, so they did not sell the investments during this year. What is the
Jackson’s taxable income?

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