Tax Chapter 20 HW Answers
4 Pages

Tax Chapter 20 HW Answers

Course Number: ACCT 325, Fall 2013

College/University: Manhattan College

Word Count: 1137

Rating:

Document Preview

20-1 Chapter 20 Check figures (2014) 21. Attribute Trust could incur its own tax liability for the year Trust generally distributes all of DNI Trust can deduct its charitable contributions in the year of, or the year after, payment Trust could claim a foreign tax credit Maximum tax rate on net longterm capital gains = 15% AMT preferences and adjustments flow through to beneficiaries ratably Trust can adopt the...

Unformatted Document Excerpt
Coursehero >> New York >> Manhattan College >> ACCT 325

Course Hero has millions of student submitted documents similar to the one
below including study guides, practice problems, reference materials, practice exams, textbook help and tutor support.

Course Hero has millions of student submitted documents similar to the one below including study guides, practice problems, reference materials, practice exams, textbook help and tutor support.

20 20-1 Chapter Check figures (2014) 21. Attribute Trust could incur its own tax liability for the year Trust generally distributes all of DNI Trust can deduct its charitable contributions in the year of, or the year after, payment Trust could claim a foreign tax credit Maximum tax rate on net longterm capital gains = 15% AMT preferences and adjustments flow through to beneficiaries ratably Trust can adopt the FIFO method for its inventory assets; the grantor had been using lower of cost or market Trust can use a tax year other than the calendar year Amount of personal exemption Simple Trust Yes, if capital gains are allocable to corpus (the general rule). Yes, simple trust is required to distribute all accounting income (by definition). No, simple trusts cannot make contributions to charitable organizations (by definition). No, credit is allocated to beneficiaries on a pro-rata basis (based on DNI). Yes Yes updated: October 22, 2013 Complex Trust Yes Depends on the terms in the trust agreement. Yes Yes Yes Yes Yes, the trust can choose its own tax accounting method Yes, the trust can choose its own tax accounting method Generally no. $300 (by definition, since it is required to distribute all of its accounting income. Generally no. $100 or $300 if the trust is required to distribute all of its accounting income. $500,000 30,000 (0) (0) (15,000) (100) $514,900 $190,378 6,000 $196,378 22. Operating income Dividend income Tax-exempt interest Net passive loss (no passive income) Deductible portion of fiduciary fees Personal exemption (trust distributes no income) Trust taxable income Tax on $484,900 ordinary income [(($484,900 $11,950) x 39.6%) + $3,090] Tax on dividend income ($30,000 20%) Total tax 24. a. Interest income, rent income, and capital gains are allocable to income which is distributed to Betty; fiduciary and tax preparation fees and cost recovery deductions are allocable to corpus. Shirley receives $165,000. Capital gains, rent income, and one-half of interest income are allocable to corpus; cost recovery expenses, one-half of interest income, and fiduciary and tax preparation fees administrative fees are allocable to income. Shirley receives nothing, since accounting income is less than zero. (This is just one of many allocations that could be written into the trust document where Shirley gets $0.) b. 20-2 25. Trust agreement provisions Fees and capital gains allocable to corpus Trust accounting income Interest income Tax-exempt interest Tax-exempt interest (AMT) Accounting income Interest income Tax-exempt interest Tax-exempt interest (AMT) trustee fee Accounting income Interest income Tax-exempt interest Tax-exempt interest (AMT) Capital gain trustee fee Accounting income 300,000 30,000 20,000 $350,000 300,000 30,000 20,000 (5,000) $345,000 300,000 30,000 20,000 40,000 (5,000) $385,000 Capital gains allocable to corpus, one-half of fees allocable to income Capital gains allocable to income, silent concerning allocation of fees Fees and exempt income allocable to corpus, silent concerning allocation of capital gain/loss 26. Attribute Separate income tax entity Controlling document Can have both income and remainder beneficiaries Computes entity accounting income, before determining entity taxable income Termination date is determinable from controlling document Legal owner of assets under fiduciary's control Document identifies both income and remainder beneficiaries Separate share rules apply Generally must use calendar tax year 27. Estate Yes. Will. Yes. Yes. Most state laws allocate fees one-half to corpus, one-half to income. Interest income $300,000 Trust Yes. Trust instrument. Yes. Yes. No, estate terminates when the required activities are completed. Beneficiaries although immediately, the executor has a fiduciary duty during the administration period. Yes. Yes. No. Yes. Trustee. Yes. Yes. Yes. Roberto's IRD = $60,000 [$40,000 (sales commissions) + $20,000 (1/3 installment gain $60,000)]. 20-3 30. a. b. c. d. $50,000 (1/2 of $100,000 accounting (ordinary) income). Ricardo's DNI $95,000. Trust taxable income $29,700. Gross income reported by each beneficiary $47,5000 (1/2 of $95,000 DNI). Taxable income $100,000 30,000 (5,000) (300) 124,700 (95,000) $29,700 124,700 300 (30,000) 95,000 100,000 Ordinary income Long-term capital gain Fiduciary fees Personal exemption Taxable income b-4 distributions deduction Less: Distribution deduction Trust taxable income (part c) Taxable income b-4 Distributions Deduction Add: Personal exemption Less: Capital gain allocable to corpus Distributable net income (part b) Distribution deduction (lesser of DNI or accounting income 31. a. $65,000 (1/2 of $130,000 accounting income). Ordinary income Long-term capital gain Accounting income b. c. d. $125,000. ($300). $62,500 (1/2 of $125,000 DNI). Accounting income $100,000 30,000 130,000 Ordinary income Long-term capital gain Fiduciary fees Personal exemption Taxable income b-4 distributions deduction Less: Distribution deduction Trust taxable income (part c) Taxable income $100,000 305,000 (5,000) (300) 124,700 (125,000) ($300) 124,700 300 125,000 130,000 Taxable income b-4 Distributions Deduction Add: Personal exemption Distributable net income (part b) Distribution deduction (lesser of DNI or accounting income 32. Lagos Trust is a complex trust. Lagos Trust's DNI of $120,000 is allocated to each beneficiary ($40,000) under the separate share rule of Sec. 663(c), a. $40,000. Willie is taxed on his share of the trust's DNI of $40,000. The second-tier distribution of $10,000 is not taxable. $25,000. The separate share rule applies. Sylvia's is taxed on her share of the DNI that is distributed to her (not the $15,000 that is accumulated by the trust). $0. All of the trust's DNI allocated to Doris has been accumulated by the trust. $55,000. The trust's DNI of $120,000 DNI $40,000 amount taxed to Willie $25,000 amount taxed to Sylvia. In other words, the trust is taxed on the distributable net income that is accumulated by the trust (Sylvia's $15,000 + Doris's $40,000). b. c. d. 20-4 33. a. DNI = $150,000. The trust makes first-tier distributions of $60,000 and $90,000 of secondtier distributions. The second-tier distributions are allocated to the beneficiaries as follows: Renee Cash received DNI allocated First Tier $30,000 $30,000 Second Tier $120,000 $100,000 Totals $150,000 $130,000 taxable interest income Note: Renee receives a $20,000 "tax-free" distribution from the trust. b. Clare First Tier Second Tier Totals c. Cash received $30,000 $0 $30,000 DNI allocated $30,000 $0 $30,000 taxable interest income First-tier distributions are the required distributions of $60,000. Second tier distributions total $90,000 ($150,000 DNI $60,000 first-tier distributions). Reported on (X) Dora's Form 1040 Jose's Estate: Form 1041 X X X X X Jose's Estate: Form 706 X X X X X X Not reported on any return. Recapture potential disappears. 36. Item a. Last paycheck b. State income tax withheld on last paycheck c. Capital gain portion of installment payment received d. Ordinary income portion of installment payment received e. Dividend income, record date was two days prior to Jos's death f. Unrealized appreciation, securities g. Depreciation recapture accrued as of date of death h. Medical expenses of last illness i. Apartment building, rents accrued but not collected as of death j. Apartment building, property tax accrued and assessed but not paid as of death X X X X X

Find millions of documents on Course Hero - Study Guides, Lecture Notes, Reference Materials, Practice Exams and more. Course Hero has millions of course specific materials providing students with the best way to expand their education.

Below is a small sample set of documents:

Community College of Baltimore County - ACCT - 225
21-3 In essence, the discounted cash-flow method calculates the expected cash inflows and outflows of a project as if they occurred at a single point in time so that they can be aggregated (added, subtracted, etc.) in an appropriate way. This enable
Colorado - PHYSICS - 4340
2345678910
Lehigh - CHEM - 151
om the definition of the thermal radiative properties and a radiation balance for anopaque surface on a total wavelength basis, according to Eq. 12.59,<α = 1 − ρ = 1 − 0.4 = 0.6.(b) The net radiation heat transfer rate to the surfacefoll
Manhattan College - ACCT - 325
16-1Chapter 16: Check figures (2014 edition)updated: October 22, 201325. The SSTP is a cooperative effort of 44 states, the District of Columbia, local governments and the business community to simplify sales and use tax collection and administration b
Manhattan College - ACCT - 325
Maturity 1 2 3 4 5 Face ValuePrice Yield Forward Rate $990.00 1.01% 1.01% $975.00 1.27% 1.54% $955.00 1.55% 2.09% $905.00 2.53% 5.52% $850.00 3.30% 6.47% $1,000.00Forward Rate8.00% 6.00% 4.00% 2.00% 0.00% 1 2 3 4 5
Manhattan College - ACCT - 325
Valuing a Corporate Bond Settlement Date Maturity Date Coupon Rate Required Rate (Yield) Redemption (as % of par) Frequency Basis (Day Count Convention) Price (value) of Bond (as % of par) Price in Dollars Solve using PV Solving for Yield on Corporate Bon
Manhattan College - ACCT - 325
Stock A Stock B Correlation Standard Deviation on Portfolio Standard Deviation Expected Return on Market Risk-Free Rate Standard Deviation on Market Required Return on PortfolioWeight STD 30% 20% 70% 40% 0.6 31.96% Low Risk High Risk 10% 20% 15% 10% 15%
Manhattan College - ACCT - 325
Year 0 1 2 3Cash Flow Cumulative Balance -100 -100 10 -90 60 -30 80 50 Payback 2.375 yearsYear 0 1 2 3 Discount Rate Discounted Payback PeriodCash Flow PV CFS Cumulative Balance -100 $(100.00) $(100.00) 10 $9.09 $(90.91) 60 $49.59 $(41.32) 80 $60.11 $1
Manhattan College - ACCT - 325
Call Option Stock Price $10.00 $15.00 $20.00 $25.00 $30.00 $35.00 $40.00 Put Option Stock Price $10.00 $15.00 $20.00 $25.00 $30.00 $35.00 $40.00 Black-Scholes Model Stock Price Strike Price Risk-Free Rate Time to Expiry Variance Standard Deviation (Volati
Manhattan College - ACCT - 325
Present Value Rate # Years Future Value Future Value Future Value Rate # Years Present Value Present Value Annuities Annual Payments Rate # Payments Future Value Present Value Annual Payments Rate # Payments Present Value Future Value Solving for Payment
Manhattan College - ACCT - 325
Year 1 2 3 4 Invest 1 2 3 4 Year 1 2 3 4 5Stock A 10% 11% 9% 10% 10000 11000 12210 13308.9 $14,639.79 Price $50.00 $38.00 $55.00 $40.00 $25.00Stock B 22% -22% 52% -4% 10000 12200 9516 14464.32 $13,885.75 Dividends $2.00 $2.00 $2.00 $2.00Stock A +1 110%
Manhattan College - ACCT - 325
Year 0 1 2 3 4 5Cash Flow Cumulative Balance (1,000,000) -1000000 150,000 -850000 270,000 -580000 420,000 -160000 450,000 290000 1,400,000 1,690,000 Payback 3.114 years($1,000,000) 150,000 270,000 420,000 450,000 1,400,000Year 0 1 2 3 4 5 Discount Rate
Manhattan College - ACCT - 325
EBIT $500,000 # SHARES 100000 Stock's Required Return 12% Stock Price $25.00 Tax Rate 40% Beta 1 Risk-Free Rate 6% Risk Premium on Market 6% Weight on Debt 0 20% 30% 40% 50% Yield on Debt 8.00% 8.50% 10.00% 12.00% D/S 0.25 0.43 0.67 1.00 beta 1.00 1.15 1.
Manhattan College - ACCT - 325
Accounting 757Prof. MandelkornHomework problems on corporate distributions, dividends and redemptions. 1/ Benson Corp. has current "E & P" = $30,000. It has an accumulated deficit = ($60,000) as of the beginning of its current year. The corporation made
Manhattan College - ACCT - 325
46a626d68368e714a80e3f52d8824f20b21cb56c.xlsTentative Course Outline - Spring 2013. Day Corporate Tax Class M. Date Day Cls Ch. Jan 9WedTopicsIntroduce concepts & research. Supplement throughout semester. Forms. Entity Election, Compare. Cap-gains, Ch
Manhattan College - ACCT - 325
Accounting 757Supplemental NotesProf. MandelkornCapital Structure of a Corp./ Special Rules for Corps. A corporation needs capital, financing, money or funds to operate and grow. Funds may come from within the corporation using reinvested earnings, or
Manhattan College - ACCT - 325
Accounting 757 Summary notes on stock dividends In this unit, we have studied corporate distributions of cash and property in the context of dividends, reductions of basis, possible capital gain and redemptions. Another kind of distribution that a corpora
Manhattan College - ACCT - 325
Figure 5.1 Section 305 Stock DividendsWas distribution payable in either stock or property at the option of shareholder? No YesDid it result in a receipt of property (cash) by some shareholders and an increase in assets or E&P to others (stock dividend)
Manhattan College - ACCT - 325
Chapter 1-Part A.Tax ResearchEdited January 1, 2013Howard Godfrey, Ph.D., CPA Professor of AccountingCopyright 2013. Howard Godfrey C13-Chp-01-1A-Research-Sources-2013Chapter 1A. Learning Objectives-1A student should be able to: 1. Understand Reason
UC Davis - GEL 001 - 001
Solar Nebula Hypothesis 1) Collapse a clump of gas and dust within the cloud. 2) Disk (proplyd) and Protosun develop. 3) Planets form in the disk (through accretion). 4)Planetesimals grow to become protoplanets. 5) Protoplanets collide. Left with planets.
UC Davis - GEL 001 - 001
SEARCH:goCornell Global Labor InstituteCornell GLI Study Finds Keystone XL Pipeline Will Create Few JobsPrevious Studies Are Misleading; Project May Kill More Jobs Than It Creates.Cornell GLI's new report, Pipe Dreams? Jobs Gained, Jobs Lost by the C
UC Davis - GEL 001 - 001
Life After Oil and Gas - NYTimes.com3/25/13 11:37 AMHOME PAGETODAY'S PAPERVIDEOMOST POPULARU.S. EditionSubscribe to Home DeliverychemrgHelpSearch All NYTimes.comWORLDU.S.N.Y. / REGIONBUSINESSTECHNOLOGYSCIENCEHEALTHSPORTSOPINIONARTSSTY
UC Davis - GEL 001 - 001
By Paul C. "Chip" Knappenberger This article appeared in The Hill (Online) on May 3, 2013.he U.S. Environmental Protection Agency recently got in a rather public spat with the U.S. Department of State over the proposed Keystone XL pipeline project. Apart
UC Davis - GEL 001 - 001
UC Davis - GEL 001 - 001
Keystone XL pipelineThe BasicsThe Canadian company TransCanada hopes to begin building the northern section of an oil pipeline that would trek close to 2,000 miles from Alberta, Canada to the Gulf Coast of Texas. If constructed, the pipeline, known as K
UC Davis - GEL 001 - 001
UC Davis - GEL 001 - 001
UC Davis - GEL 001 - 001
Paper 1 prompt: Keystone XL Pipeline: Jobs vs. Environment? Energy for electricity that powers homes and industry commonly comes from sources like coal, natural gas, hydroelectricity or nuclear power. Renewables like wind and solar constitute a very smal
UC Davis - GEL 001 - 001
UC Davis - GEL 001 - 001
Tang Kei ManGoogle Earth Assignment #21) Distance from epicenter to Port au Prince airport? 29.88km2) Highest magnitude aftershock? 5.93) How many days after the main quake did large aftershocks occur? The main quake occurred on 12th Jan and the la
UC Davis - GEL 001 - 001
Using Google Earth to Explore the 2010 Haiti earthquakeGoal: Last week you learned to use Google Earth. In this exercise youll use GoogleEarth to explore the geological factors and societal effects of the Haitiearthquake. It should take you about an ho
Purdue - STAT - 301
STAT 301 (Traditional and Online)SYLLABUS for Summer 2011INSTRUCTOR:EMAIL:Any student may attend the office hours of any STAT 301 instructor. A master scheduleof all STAT 301 office hours will be posted on the course website.COURSE WEBSITE: http:/ww
Georgia Perimeter - MATH - 2431
Evaluating Limits analyticallyOne-sided limits (Infinite limits)Given ( ), + ( ), + ( ) ( )Note: can be any real number, and ( ) can be a rational functionFirst factor and simplify the function ()If the value of x is approaching or pick anumber smal
Georgia Perimeter - MATH - 2431
Evaluating Limits analyticallyLimits at InfinityGiven lim ( ) or lim ( ), where( ) = + 1 1 +. . . 2 2 + 1 + 0is a polynomial function of degree nLimit of a polynomial is determined by the behavior of theleading term ( )Example 1: Evaluate lim (5 3
Georgia Perimeter - MATH - 2431
CONTINUOUS/DISCONTINUOUS FUNCTIONSTo determine if a function, f, is continuous ata number, c, test the following conditions:Check to be sure that the function is defined atc. In other words, c must be in the domain of f.That is, f(c) must exist.If f
Georgia Perimeter - MATH - 2431
Limits & ContinuityA function is continuous at a if:1. f(a) exists2.existsRemember, for a limit to exist,3. f(a) =Created by Drs. Marjorie Lewkowicz & Behnaz Rouhani, February 2013Example 1: Given the following graph find:a.b. lim3c. limd.
Georgia Perimeter - MATH - 2431
The Tangent and Velocity ProblemsTangent ProblemThe word tangent is derived from the latin word tangens, which means touching.Thus, tangent to a curve touches the curve. We all know what is meant by the slopeof a straight line, which tells us the rate
Georgia Perimeter - MATH - 2431
The Tangent and Velocity ProblemsTangent ProblemThe word tangent is derived from the latin word tangens, which means touching.Thus, tangent to a curve touches the curve. We all know what is meant by the slopeof a straight line, which tells us the rate
Georgia Perimeter - MATH - 2431
The Limit of a functionWe have seen in previous section how limits arise when we want to find tangent toa curve or instantaneous rate of change of a function. If fx gets arbitrarily close to L(as close to L as we like) for all x sufficiently close to a
Georgia Perimeter - MATH - 2431
Calculating Limits Using the Limit LawsIn previous section we used calculator and graphs to guess the values of limits. Butwe saw that such methods do NOT always lead to correct answer. In this section weuse the following properties of limits called Li
Georgia Perimeter - MATH - 2431
ContinuityWhen we plot function values generated or collected in the field, we often connectthe plotted points with an unbroken curve to show what the functions values are likelyto have been at the times we did not measure. In doing so we are assuming
Georgia Perimeter - MATH - 2431
Derivatives and Rates of ChangeNow that we have learned limits and techniques for computing them, we will returnto the tangent and velocity problems.TangentsThe tangent line to the curve y fx at point a, fa is the linefx faprovided this limit exist.
Georgia Perimeter - MATH - 2431
The Derivative as a FunctionIn previous section we defined the derivative of a function as:f a limh0fa h fah(1)fx faxa(2)ORf a limxaWe know that value of f at x can be interpreted geometrically as the slope of thetangent line to the graph of
Georgia Perimeter - MATH - 2431
Limits Involving InfinityInfinite Limits & Vertical AsymptotesPreviously we concluded that lim 12 does not exist.x0 xBy observing from the table 1 that as x becomes close to 0, x 2 becomes close to 0,and 12 becomes very large as shown below in table
Georgia Perimeter - MATH - 2431
Limits at InfinityHere to find limits at infinity we let x become arbitrarily large (positive or negative)and see what happens to y.Lets begin by investigating the behavior of the function2fx x 2 1x 1as x becomes large.y1.00.5-7-6-5-4-3-2
Georgia Perimeter - MATH - 2431
Related RatesIf two functions at and bt are functions of time and they are related by someequation, then by implicit differentiation, their derivative a t and b t are also related.For instance when air is pumped into a balloon, both radius and volume a
Georgia Perimeter - MATH - 2431
Related RatesRead the problem carefully, make a sketch and label the quantitiesWrite down one or more equations that express the relationship among variablesUsing the Chain Rule, implicitly differentiate both sides of the equation withrespect to tSol
Georgia Perimeter - MATH - 2431
Derivatives and Shapes of CurvesThe Mean Value TheoremWe know that constant functions have zero derivatives, but could there be a morecomplicated function whose derivative is always zero? If two functions have identicalderivatives over an interval, ho
Georgia Perimeter - MATH - 2431
Extreme Values of FunctionsSome of the most important applications of differential calculus are optimizationproblems. (Finding the best way of doing something) Some examples are as follows:a. What is the shape of a can that minimizes manufacturing cost
Georgia Perimeter - MATH - 2431
Intervals of Increasing & DecreasingFind the first derivative of the function, f.Find critical numbers.Set the first derivative equal to zeroand solve.Determine whether the first derivative isundefined for any x-values.Make sure these numbers are i
Georgia Perimeter - MATH - 2431
Absolute Maximum & Minimum Values of a FunctionFind the first derivative of the function, f.Find critical numbers.Set the first derivative equal to zero and solve.Determine whether the first derivative is undefined for anyx-values.Make sure these nu
Georgia Perimeter - MATH - 2431
CONCAVITY AND INFLECTION POINTSFind the Second Derivative of the function, f.Set the Second Derivativeequal to zero and solve.To determine if these numbers arepotential Inflection Points, makesure they are in the domain of theoriginal function, f.
Georgia Perimeter - MATH - 2431
Optimization ProblemsThe methods we learned in this unit for finding extreme values have practicalapplications in many areas of life. In solving such problems the greatest challenge isto convert the word problem into a mathematical optimization problem
Georgia Perimeter - MATH - 2431
Newtons MethodFor a quadratic equation ax 2 bx c 0 there is a well known formula for theroots. For third and fourth degree equations there are also formulas for the roots, butthey are extremely complicated. If f is a polynomial of degree 5 or higher, t
Georgia Perimeter - MATH - 2431
Areas and DistancesAreaWe know how to find area of a region with straight sides. For instance, the area ofa rectangle is defined as the product of the length and the width. The are of a triangleis half the base times the height. The are of a polygon i
Georgia Perimeter - MATH - 2431
AntiderivativesWe have studied how to find the derivative of a function. However, many problemsrequire that we recover a function from its known derivative. For instance, we mayknow the velocity function of an object falling from an initial height and
Georgia Perimeter - MATH - 2431
Georgia Perimeter - MATH - 2431
Georgia Perimeter - MATH - 2431
Georgia Perimeter - BIO - 2108
ForestsunEngelman spruceaspenlodgepole pinejack rabbitjunipersagebrushred-tailed hawkred squirrelgrasslichenchipmunkwood peckerwaxwingdeerbeetleelkgrasshopperfungigarter snakebacteriaturkey vulture
Georgia Perimeter - BIO - 2108
POPULATION GENETICS PROBLEMS1.PKU is a disease caused by a recessive allele. If untreated, it causes damage tothe nervous system and is usually fatal before the individual can reproduce. InEurope the incidence is 1 in 10,000, or a q2 = 0.0001.a.b.I