Gross Income - Ch03

Gross Income - Ch03 - CHAPTER 3 GROSS INCOME SOLUTIONS TO...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
CHAPTER 3 GROSS INCOME SOLUTIONS TO PROBLEM MATERIALS Status: Q/P Question/ Present in Prior Problem Topic Edition Edition 1 Issue recognition Unchanged 1 2 Economic versus taxable income Unchanged 2 3 Ethics problem Unchanged 3 4 Gross income Unchanged 4 5 Issue recognition Unchanged 5 6 Realization rationale Unchanged 6 7 Gross income: investments Unchanged 7 8 Gross income Unchanged 8 9 Accrual basis versus cash basis Unchanged 9 10 Accrual basis versus cash basis Unchanged 10 11 Accrual method and disputed income Unchanged 11 12 Accrual basis versus cash basis Unchanged 12 13 Constructive receipt Unchanged 13 14 Advance payments Unchanged 14 15 Constructive receipt Unchanged 15 16 Prepaid rent and deposits New 17 Who is the taxpayer? Unchanged 17 18 Original issue discount Unchanged 18 19 Issue recognition Unchanged 19 20 Below-market loans Modified 20 21 Below-market loans Unchanged 21 22 Below-market loans Unchanged 22 23 Tax benefit rule Unchanged 23 24 Taxable versus tax exempt bonds Unchanged 24 25 Ethics problem Unchanged 25 26 Tax exempt bonds New 27 Life insurance Unchanged 26 28 Life insurance Unchanged 27 29 Life insurance Unchanged 28 30 Issue recognition Unchanged 29 3-1
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
3-2 2003 Entities Volume/Solutions Manual Status: Q/P Extender Present in Prior Problem Topic Edition Edition 31 Capital transactions: determination of tax Modified 31 32 Capital transactions: determination of tax Modified 32 33 Accrual basis versus cash basis Unchanged 33 Bridge Discipline Problem 1 Accounting policies and tax law effect Unchanged 1 on earnings 2 Accrual basis versus cash basis Unchanged 2 Research Problem 1 Income from discharge of indebtedness Unchanged 1 2 Prepaid income Unchanged 2 3 Imputed interest Unchanged 3 4 Gross income Modified 4 5 Internet activity Unchanged 5 6 Internet activity Modified 6 7 Internet activity Unchanged 7 PROBLEM MATERIAL 1. The following issues are suggested from the facts presented: Is the arrangement between Jack and Donna a partnership? Does Jack have any income when the crop is harvested in September? Is Jack taxed when the crops are sold, or when he receives payment (i.e., the $12,000 he received in October on the September sale and his share of the $40,000 he received in January on the October sale)? Is Jack taxed on the crop he received for personal use? If Jack is taxed on the crop he received for personal use, is the amount of income the cost of the crop or its fair market value? pp. 3-4 to 3-9 2. a. The taxpayer has a $1,000 economic gain on the sale because the taxpayer's economic income would be the selling price ($10,000) less the value of the asset as of the beginning of the year ($9,000). Gross income for tax purposes is $10,000 - $6,000 = $4,000.
Background image of page 2
Gross Income 3-3 b. The use of the automobile does not result in economic income because the taxpayer owns the corporation and thus owns the automobile. For tax purposes, the taxpayer is deemed to have received an $800 dividend from the corporation. c.
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 14

Gross Income - Ch03 - CHAPTER 3 GROSS INCOME SOLUTIONS TO...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online