Category: Writing

Gift Tax. Betty, a married taxpayer, makes the following
gifts during the current year (2019): $20,000 to her church, $100,000 to her
daughter, and $40,000 ro her husband. What is the amount of Berty’s taxable
gifts for the current year (assuming that she does not elect to split the gifts
with her spouse)?

Carlos inherits 100 shares of Allied Corporation stock from
his father. The stock cost his father $8,000 and had a $25,000 FMV on the date
of his father’s death in 2019. The alternate valuation date was not elected. If
Carlos sells the Allied Corporation stock for $27,000, what would be his
taxable gain on the sale?

Marginal Tax Rate. Jill and George are married and file a
joint return. They expect to have $425,000 of taxable income in the next year
and are considering whether ro purchase a personal residence that would provide
additional tax deductions of $40,000 for mortgage interest and real estate
taxes.
a. What is their marginal tax rate for purposes of making
chis decision?
b. What is the tax savings if the residence is acquired?

Carmen has computed that her average tax rate is 16% and her marginal tax rate is 24% for the current year. She is considering whether to make a charitable contribution to her church before the end of the tax year. Which tax rate is of greater significance in measuring the tax effect for her decision? Explain.

Tax Rates. Latesha, a single taxpayer, had the following
income and deductions for the tax year 2019:
a. Compute Laresha’s taxab le income and federal tax
liability for 2019 (round to dollars and ignore the qualified business income
deduction for chis problem).
b. Compute Laresha ‘s marginal, average, and effective tax
rates.
c. For tax planning purposes, which of the three rates in
Part b is the most important?

1.The profession of tax practice involves four principal
areas of activity. Discuss these four areas.
2. Many tax professionals have moved into the field of financial
planning for their clients.
a. How do taxes impact financial planning for a client?
b. Why do tax professionals have a perfect opportunity to
perform financial planning for their clients?

1.What is the stature of limitations for transactions
involving:
a. Fraud (e.g., failure to file a tax return)
b. Disallowance of tax deduction items
c. The omission of rental income that is greater than 25 %
of the taxpayer’s reported gross income
2. In reference to tax research, what is meant by the best
possible defensibly correct solution?

Anya is concerned that she will be audited by the IRS.
a. Under what circumstances is it possible chat the IRS will
review each line item on her tax return?
b. ls it likely that all items on Anya’s return will be
audited?
2. If a taxpayer files his or her tax return and receives a
tax refund from the IRS, does this mean chat the IRS feels that the return is
correct and will not be subject to a future audit.

1. What is the primary service function provided by the
National Office of the IRS?
2. What types of taxpayers are more likely to be audited by
the IRS?
3. a. What does the term “hazards of litigation”
mean in the context of taxation?
b. Why would the IRS or a taxpayer settle or compromise
a case based on the “hazards of litigation”?

The PDQ Partnership earned ordinary income of $150,000 in
2019. The partnership has three equal partners, Pete, Donald, and Quint. Quint,
who is single, uses the standard deduction, and has ocher income of $15,000
(nor connected with the partnership) in 2019. He receives a $30,000
distribution from the partnership during the year. What is Quint’s taxable
income in 2019?