Chapter 11 - Investments
True / False Questions
1. Generally, interest income is taxed at preferential capital gains rates and dividend income is
taxed at ordinary rates.
2. Interest earned on U.S. savings bonds is intere
Corporations are required to file a tax return annually regardless of their taxable income.
The tax return filing requirements for individual taxpayers only depend on the taxpayer's filing status.
If a taxpay
The goal of tax planning is tax minimization.
Nontax factors do not play an important role in tax planning.
Virtually every transaction involves the taxpayer and two other parties that have an interest in the
Gross income includes all income realized during the year.
Excluded income will never be subject to the federal income tax.
The all-inclusive definition of income means that gross income is defined very broad
The Internal Revenue Code authorizes deductions for trade or business activities if the expenditure
is "ordinary and necessary".
Business activities are distinguished from other activities in that business activities are m
Taxes influence many types of business decisions but generally do not influence personal decisions.
Taxes influence business decisions such as where a business should locate or how a business should be
Relative to for AGI deductions, from AGI deductions tend to relate to items that are more personal in
Taxpayers need not include an income item in gross income unless there is a specific tax provision
Current compensation is usually comprised of salary, wages, and bonuses.
Employees complete a Form W-2 to specify their income tax withholding.
Employers computing taxable income receive a deduction for salar
The amount realized is the sale proceeds less the adjusted basis.
Generally, the amount realized is everything of value received in a sale less selling expenses.
The adjusted basis is the cost basis less cost
Like financial accounting, most business property must be capitalized for tax purposes.
Tax cost recovery methods include depreciation, amortization, and depletion.
If a business mistakenly claims too little
The profit motive distinguishes "business" activities from "personal" activities.
All business expense deductions are claimed above the line.
All investment expenses are itemized deductions.
Qualified retirement plans include defined benefit plans but not defined contribution plans.
Defined benefit plans specify the amount of benefit an employee will receive on retirement while defined
contribution plans speci
Both the width (or range) of the tax brackets (the amount of income taxed at a particular rate) in the tax
rate schedules and the range of the tax rates in the tax rate schedules (the difference between the lowest
tax rate and the highe
CORPORATIONS: ORGANIZATION AND CAPITAL STRUCTURE
4.1 ORGANIZATION OF AND TRANSFERS TO CONTROLLED CORPORATIONS
Under 351, neither gain nor loss is recognized on the transfer by one or more persons of
property to a corp
CORPORATIONS: REDEMPTIONS AND LIQUIDATIONS
SUMMARY OF CHANGES IN THE CHAPTER
The following are notable changes in the chapter from the 2014 Edition. For major changes, see
the Preface to the Instructors Edition of the text.
Research Problem 1. Lynn Jones, Shawn, Walt, and Donna are trying to decide whether they
should organize a corporation and transfer their shares of stock they own in several corporations
to this a new corporation. All of their shares are listed on the New
UNDERSTANDING AND WORKING
WITH THE FEDERAL TAX LAW
Note: Solutions to Research Problems can be prepared by using the Checkpoint
Student Edition online research product, which is available to accompany this text. It is
I. HOW DO YOU MAKE DECISIONS?
Most of us make decisions automatically and without realizing that people have diverse
behaviors, which they bring to management positions. In addition, new managers
typically use a different decision behavior
Recreational Center #1
Assignment 4 Group Members: Ashley Covington, Carrie McGee,
Leslie Nelson, Gerica Robertson, Andrew Miller, and Cedric Bell.
Every fitness organization has a website that appeals to a target audience. Most people
will evaluate a web
Cedric Bell, Ashley Covington, Gerica Robertson, Carrie McGee
You have undoubtedly heard of Vans. The company has sold footwear, apparel, and extreme sports equipment
communications which is the careful coordination of all promotional messages for a produ
1. What do you perceive to be the outcome of being raised by a community?
The outcome of being raised by the community would be positive. You would know how to
interact with different people everyday. Real life situational learning would be a main factor
Game of Money
The seminar that I attending about how to save spend and invest my money was very
interesting. The speaker told us everybody wants to win and with spending money you must win
in order not to be broke. He explained to us that th
Wal-Mart is one of the world's largest and most profitable retailers. The Wal-Mart culture is built on
obtaining the most current information about what customers want. The use of information technology
has been an essential part of Wal-Mart's growth over
Marriage and Family
In today society the having both parents working outside the home is becoming more
common. The most common choice of child care is daycare. Daycares is place where a parent
drops off their kid (s) until
Child behaviors can be very unexspected. Especially when that child does not have any discipline or good
manners. Parenting disciplinary techiques have always been in question due to different beliefs in how to raise a
child. First the p
Problem - Child Behavior
Everybody has witness a scenario when you see those loud crazy kids running, yelling and
totally disrupting the peace in a grocery store. While the parent which is usually very
embarrassed bargains with their out of control kid(s)
Method Used- Types of Disciplining
Some parents have a difficult time disciplining their child due to the lack of consistency. In
order to have the right amount of discipline the parent should know their child and know how
their child benefits to their ty
A: What age to spank
Spanking effectiveness only works if practiced correctly at the right age. Spanking is not only
with using a belt or hand direct to the bottom. But it can also be as simple as a small slap on the
hand or pinch on the arm. Spankings ca
B: When to actually spank
There is a lot of negative views towards spanking children. Spanking has had this view because
of the many example of a child being physically abused by their parents. Excessive spanking
from the parent with no good reason or exp
C: What are the cons of spanking
There are studies that indicate that 85 percent of American children in middle school and high
school have experienced spankings. If there are that many children being spanked many fear if
they are being spanked properly.