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Chapter: 8 -Problem: 62 >> In 2023, Deon and NeNe are married filing jointly. Deon and NeNe’s taxable income is $1,390,000 (all ordinary), and they itemize their deductions as follows: real property taxes of $10,000, charitable contributions of $30,000, and mortgage interest expense of $40,000 (acquisition debt of $700,000 for home). What is Deon and NeNe’s AMT? Complete Form 6251 for Deon and NeNe.
Answer Preview: Deon and NeNe will not owe AMT. Description (1) Regular taxable inc…

, Chapter: 19 -Problem: 56 >> On August 1, 2022, Nikola (Nasdaq ticker NKLA) agreed to acquire Romeo Power (NYSE ticker RMO). The Form 8-K for Nikola describes the transaction and was filed with the SEC, and can be accessed the Form 8-K at the SEC’s Investor website:(https://www.sec.gov/ix?doc=/Archives/edgar/data/0001731289/000119312522209149/d580862d8k.htm).Read “Item 1.01, Entry into a Material Definitive Agreement” and det
Answer Preview: This is a reverse (downstream) triangular reorganization where the target …

, Chapter: 8 -Problem: 32 >> Diane has a job working three-quarter time. She hired a relative to take care of her two small children so Diane could work. Do Diane’s child care payments to her relative qualify for the child and dependent care credit in 2023? Explain.
Answer Preview: If Dianes children are both dependents under the age of 13 and if her relative i…

, Chapter: 16 -Problem: 64 >> Timpanogos Inc. is an accrual-method calendar-year corporation. For 2023, it reported financial statement income after taxes of $1,342,000. Timpanogos provided the following information relating to its activities for the year: Required:Reconcile book income to taxable income for Timpanogos Inc. Be sure to start with book income and identify all of the adjustments necessary to arrive at taxable inc
Answer Preview: a and b. Timpanogoss taxable income is $1,521,000, computed as follows: c. Timpanogoss Schedule M-1 …

, Chapter: 8 -Problem: 48 >> In 2023, Lisa and Fred, a married couple, have taxable income of $400,000. If they were to file separate tax returns, Lisa would have reported taxable income of $225,000 and Fred would have reported taxable income of $175,000. What is the couple’s marriage penalty or benefit?
Answer Preview: The couple would have a marriage benefit of $568. That is, they pay $56…

, Chapter: 17 -Problem: 14 >> Why do the book and tax bases differ for fixed assets?
Answer Preview: The net carrying value of fixed assets will differ between book and tax due to differen…

, Chapter: 16 -Problem: 18 >> Distinguish the tax treatment of a NOL incurred in 2017, a NOL incurred in 2020, and a NOL incurred in 2023.
Answer Preview: For NOLs incurred in tax years beginning before 2018 (such as the NOL incurred in 2017), corporation…

, Chapter: 8 -Problem: 53 >> Brooklyn files as a head of household for 2023. They claimed the standard deduction of $20,800 for regular tax purposes. Their regular taxable income was $80,000. What is Brooklyn’s AMTI?
Answer Preview: Brooklyn has an AMTI of $100,800. The standard ded…

, Chapter: 8 -Problem: 47 >> Whitney received $75,000 of taxable income in 2023. All of the income was salary from her employer. What is her income tax liability in each of the following alternative situations?a. She files under the single filing status.b. She files a joint tax return with her spouse. Together their taxable income is $75,000.c. She is married but files a separate tax return. Her taxable income is $75,000.d. S
Answer Preview: Whitney has an income tax liability of $11,808. a. b. Whitney has a…

, Chapter: 18 -Problem: 14 >> A corporation distributes noncash property to a shareholder, and the fair market value of the distributed property is greater than its adjusted basis. What impact does the distribution have on the corporation’s current earnings and profits? Why is it important to know the E&P adjusted basis of the property?
Answer Preview: The distribution of the property will result in a taxable gain and incre…

, Chapter: 8 -Problem: 2 >> In 2023, for a taxpayer with $50,000 of taxable income, without doing any actual computations, which filing status do you expect to provide the lowest tax liability? Which filing status provides the highest tax liability?
Answer Preview: For a taxpayer with $50,000, the married filing joi…

, Chapter: 8 -Problem: 63 >> Henrich is a single taxpayer. In 2023, his taxable income is $530,000. What are his income tax and net investment income tax liability in each of the following alternative scenarios?All of his income is salary from his employer. Assume his modified AGI is $570,000.His $480,000 of taxable income includes $2,000 of long-term capital gain that is taxed at preferential rates. Assume his modified AGI i
Answer Preview: a. b. c. d. Henrich's total tax liability is $157,394 …

, Chapter: 17 -Problem: 15 >> What are the requirements for an obligation to be a tax liability (or to have tax basis)?
Answer Preview: An obligation is a tax liability if, and to the extent, t…

, Chapter: 8 -Problem: 61 >> In 2023, Janet and Ray are married filing jointly. They have five dependent children under 18 years of age. Janet and Ray’s taxable income (all ordinary) is $2,400,000 and they itemize their deductions as follows: state income taxes of $10,000 and mortgage interest expense of $25,000 (acquisition debt of $300,000). What is Janet and Ray’s AMT? Complete Form 6251 for Janet and Ray.
Answer Preview: Janet and Ray will not owe AMT. Description (1) Regular taxable i…

, Chapter: 8 -Problem: 54 >> Sylvester files as a single taxpayer during 2023. He itemizes deductions for regular tax purposes. He paid charitable contributions of $7,000, real estate taxes of $1,000, state income taxes of $4,000, and mortgage interest of $2,000 on $30,000 of acquisition indebtedness on his home. Sylvester’s regular taxable income is $100,000. What is Sylvester’s AMTI?
Answer Preview: Sylvester's AMTI is $105,000. Description (1) Regular ta…

, Chapter: 8 -Problem: 50 >> Lacy is a single taxpayer. In 2023, her taxable income is $48,000. What is her tax liability in each of the following alternative situations?All of her income is salary from her employer.Her $48,000 of taxable income includes $1,000 of qualified dividends.Her $48,000 of taxable income includes $5,000 of qualified dividends.
Answer Preview: a. Lacys total tax is $5,867 50. b. c. Description (1) Taxable …

, Chapter: 8 -Problem: 49 >> In 2023, Jasmine and Thomas, a married couple, have taxable income of $150,000. If they were to file separate tax returns, Jasmine would have reported taxable income of $140,000 and Thomas would have reported taxable income of $10,000. What is the couple’s marriage penalty or benefit?
Answer Preview: The couple would have a marriage benefit of $4,385. That …

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