Dave is a plumber who uses the cash method of accounting. This year Dave requested that his clients make their checks payable to his son, Steve. This year Steve received checks in the amount of $109,500 for Dave's plumbing services. Which of the following is a true statement? Dave is taxed on $109,500 of plumbing income this year. Steve is taxed on $109,500 of plumbing income this year. Steve is taxed on $109,500 of income from gifts received this year. Dave may deduct the $109,500 received by Steve. All of these are true
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- Manny, a calendar-year taxpayer, uses the cash method of accounting for his sole proprietorship. In late December he performed $22,000 of legal services for a client. Manny typically requires his clients to pay his bills immediately upon receipt. Assume Manny's marginal tax rate is 37 percent this year and next year, and that he can earn an after-tax rate of return of 8 percent on his investments. a. What is the after-tax income if Manny sends his client the bill in December? After-tax income b. What is the after-tax income if Manny sends his client the bill in January? Use Exhibit 3.1. (Round your answer to the nearest whole dollar amount.) After-tax income c. Based on requirements a and b, should Manny send his client the bill in December or January? O December O JanuaryHank, a calendar-year taxpayer, uses the cash method of accounting for his sole proprietorship. In late December, he performed $27,000 of legal services for a client. Hank typically requires his clients to pay his bills immediately upon receipt. Assume his marginal tax rate is 32 percent this year and will be 35 percent next year, and that he can earn an after-tax rate of return of 12 percent on his investments. Use Exhibit 3.1. What is the after-tax income if Hank sends his client the bill in January? What is the after-tax income if Hank expects his marginal tax rate to be 24 percent next year and sends his client the bill in January?Isabel, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship. In late December she received a $44,000 bill from her accountant for consulting services related to her small business. Isabel can pay the $44,000 bill anytime before January 30 of next year without penalty. Assume her marginal tax rate is 37 percent this year and next year, and that she can earn an after-tax rate of return of 9 percent on her investments. a. What is the after-tax cost if Isabel pays the $44,000 bill in December? After-tax cost b. What is the after-tax cost if Isabel pays the $44,000 bill in January? Use Exhibit 3.1. (Round your answer to the nearest whole dollar amount.) After-tax cost
- Isabel, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship. In late December she received a $41,000 bill from her accountant for consulting services related to her small business. Isabel can pay the $41,000 bill anytime before January 30 of next year without penalty. Assume her marginal tax rate is 37 percent this year and next year, and that she can earn an after-tax rate of return of 6 percent on her investments. Required: What is the after-tax cost if Isabel pays the $41,000 bill in December? What is the after-tax cost if Isabel pays the $41,000 bill in January? Use Exhibit 3.1. Note: Round your answer to the nearest whole dollar amount. Based on requirements a and b, should Isabel pay the $41,000 bill in December or January?Isabel, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship. In late December she received a $41,000 bill from her accountant for consulting services related to her small business. Isabel can pay the $41,000 bill anytime before January 30 of next year without penalty. Assume her marginal tax rate is 37 percent this year and next year, and that she can earn an after-tax rate of return of 6 percent on her investments. Required: What is the after-tax cost if Isabel pays the $41,000 bill in December?Jayana, a calendar-year taxpayer, uses the cash method of accounting for a sole proprietorship. In late December Jayana received a $37,000 bill from her accountant for consulting services related to her small business. Jayana can pay the $37,000 bill anytime before January 30 of next year without penalty. Assume her marginal tax rate is 37 percent this year and next year, and that she can earn an after-tax rate of return of 11 percent on her investments. a. What is the after-tax cost if Jayana pays the $37,000 bill in December? After-tax cost b. What is the after-tax cost if Jayana pays the $37,000 bill in January? Use Exhibit 3.1. (Round your answer to the nearest whole dollar amount.) After-tax cost c. Based on requirements a and b, should Jayana pay the $37,000 bill in December or January? O December O January
- Isabel, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship. In late December she received a $29,000 bill from her accountant for consulting services related to her small business. Isabel can pay the $29,000 bill anytime before January 30 of next year without penalty. Assume her marginal tax rate is 37 percent this year and next year, and that she can earn an after-tax rate of return of 12 percent on her investments. Required: a. What is the after-tax cost if Isabel pays the $29,000 bill in December? b. What is the after-tax cost if Isabel pays the $29,000 bill in January? Use Exhibit 3.1. Note: Round your answer to the nearest whole dollar amount. c. Based on requirements a and b, should Isabel pay the $29,000 bill in December or January? Complete this question by entering your answers in the tabs below. Required A Required B After-tax cost Required C What is the after-tax cost if Isabel pays the $29,000 bill in December?Isabel, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship. In late December she received a $29,000 bill from her accountant for consulting services related to her small business. Isabel can pay the $29,000 bill anytime before January 30 of next year without penalty. Assume her marginal tax rate is 37 percent this year and next year, and that she can earn an after-tax rate of return of 12 percent on her Investments. Required: a. What is the after-tax cost if Isabel pays the $29,000 bill in December? b. What is the after-tax cost if Isabel pays the $29,000 bill in January? Use Exhibit 3.1. Note: Round your answer to the nearest whole dollar amount. c. Based on requirements a and b, should Isabel pay the $29,000 bill in December or January?Tamara Moore is an unmarried, 37-year-old taxpayer. She will use the head of household filing status, and she has the following income for the year: Wages: $36,500. Bank interest: $375. Municipal bond interest: $215. Lottery prize: $500. Gift from her father: $5,000. Tamara contributed $1,500 to her traditional IRA, which she will deduct. What is her adjusted gross income? $35,590 $35,875 $40,875 $41,090
- Frankie lives in NJ, is divorced with one child, and made $80,000 last year. He qualified for several below the line, itemizable deductions (He paid $5,600 in mortgage interest, $9,500 in property taxes, and he donated $550 worth to charity during the year). Frankie can claim one child tax credit of $2,000. His ex-spouse agreed that he can claim head of household this year. Use the Income Tax Table Reference Sheet to answer the following questions. 1. Should Frankie itemize his taxes or take the standard deduction? * A. Itemize B. Standard Please answer very soon will give rating surelysabel, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship. In late December she received a $41,000 bill from her accountant for consulting services related to her small business. Isabel can pay the $41,000 bill anytime before January 30 of next year without penalty. Assume her marginal tax rate is 37 percent this year and next year, and that she can earn an after-tax rate of return of 6 percent on her investments. Required: What is the after-tax cost if Isabel pays the $41,000 bill in December? What is the after-tax cost if Isabel pays the $41,000 bill in January? Use Exhibit 3.1. Note: Round your answer to the nearest whole dollar amount. Based on requirements a and b, should Isabel pay the $41,000 bill in December or January?Carol makes the following business gifts during the tax year. Calculate Carol's allowed deduction for each business gift and her total allowed deduction. If an amount is zero, enter "0". Donee Amount Deduction 1. Mr. Jones (a client) $20 $fill in the blank 1 2. Mr. Brown (a client) 32 fill in the blank 2 3. Mrs. Green (a client) received a $15 gift while herhusband, Mr. Green (a non-client) received an $18 gift 33 fill in the blank 3 4. Ms. Gray (Carol's supervisor) 45 fill in the blank 4 5. Mr. Edwards (a client) receiving a display rack with Carol's company name on it 75 fill in the blank 5 6. Various customers (receiving ball point pens with the company name on them) 140 fill in the blank 6 Total business gift deduction $fill in the blank 7