T12S-Chp-02-2-HW-Sol-2012

T12S-Chp-02-2-HW-Sol-2012 - Page 1 of 4 Name Home...

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bdd3328834125910cd0ad8e2ab97f0c32cac412b.doc. Page 1 of 4 Name: Home work-Chapter 2. Prepare your solutions for this homework before the chapter is covered in class. Homework will not be collected by the instructor. Note: answers may be rounded to nearest dollar. (We don't know what rules will be changed in 2012 – Use the rules in your textbook which are mainly for 2011). Part 1. General Concepts (ability to pay, administrative convenience, arms-length, pay-as-you-go). 1 The allowance of deductions in calculating taxable income and the use of a progressive tax rate structure are a direct application of the a. Ability to Pay Concept. b. Administrative Convenience Concept. A c. Arm’s-Length Transaction Concept. d. Capital Recovery Concept. e. Pay-as-You-Go Concept. 2 Michael coaches a little league baseball team. He makes 15 copies of the team’s schedule to give to the players on his employer’s copy machine (with his consent). The cost of the copies is not income to Michael due to the a. Ability to Pay Concept. b. Administrative Convenience Concept. B c. Arm’s-Length Transaction Concept. d. Capital Recovery Concept. e. Pay-as-You-Go Concept. 3 Allowing individuals to deduct a standard deduction amount in lieu of itemizing their allowable personal deductions is an application of the a. Ability to Pay Concept. b. Administrative Convenience Concept. B c. Arm’s-Length Transaction Concept. d. Capital Recovery Concept. e. Pay-as-You-Go Concept. 4 Susan purchased a lot for investment purposes. She paid $10,000 for the lot. Three years later she sold the lot to her daughter for its current value of $8,000. Susan cannot deduct the loss due to a. Ability to Pay Concept. b. Administrative Convenience Concept. C c. Arm’s-Length Transaction Concept. d. Capital Recovery Concept. e. Pay-as-You-Go Concept. 5 Withholding of taxes from the taxpayers wages and quarterly estimated tax payments are a result of the a. Ability to Pay Concept. b. Administrative Convenience Concept. E c. Arm’s-Length Transaction Concept. d. Capital Recovery Concept. e. Pay-as-You-Go Concept. 6 Thomas had $8,500 withheld from his paycheck, but since he has a large amount of interest and dividends, he is required to make quarterly estimated tax payments due to the a. Ability to Pay Concept. b. Administrative Convenience Concept. E c. Arm’s-Length Transaction Concept. d. Capital Recovery Concept. e.
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T12S-Chp-02-2-HW-Sol-2012 - Page 1 of 4 Name Home...

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