Mirza_Assignment 1

Mirza_Assignment 1 - Ayesha Mirza Taxation for Business...

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Ayesha Mirza Taxation for Business Entities 2010 Assignment 1 Chapter 1 1. Some tax considerations Aqua should investigate include the State and local income taxes, state and local sales taxes, state and local property taxes. 17. a. Jill’s taxable income is computed as follows: Income broadly conceived +$220,000 Less: exclusions - (30,000) Gross income +$190,000 Less: deductions for AGI -(50,000) AGI $140,000 Less: greater of Itemized deductions + $20,000 Standard deduction +$5,700 - (20,000) Less: personal exemption - (3,650) Taxable income $116,350 Using Tax Rate Schedule X , Jill’s total tax liability for 2009 = $16,750 + 0.28 [$116,350 – $82,250] = $26,298 Reduction of tax liability: $26,298 - $19,000 (tax credit) = $ 7,298. The $5,202 excess of estimated tax payments of $12,500 over the $7,298 could be refunded or applied to the next year’s tax liability. b. Jill’s Corporation Tax Income: Income broadly conceived $220,000 Less: exclusions - (30,000) Gross income $190,000 Less: deductions - (70,000) Taxable income $120,000 - Corporation receives no personal exemption and that no distinction is
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Mirza_Assignment 1 - Ayesha Mirza Taxation for Business...

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