Solutions to Chapter 12 Problem Assignments
Check Your Understanding
1. Gift Determination
Discount Auto Company sold an automobile at a $2,000 discount to an unrelated customer. Is
this a gift?
Solut
Solutions to Chapter 9 Problem Assignments
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1. Corporate Income
Explain how a corporations income is subject to double taxation.
Solution: Corporate income is taxed as regular
Solutions to Chapter 8 Problem Assignments
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1. Gain/Loss Deferral
How are gain and loss deferral usually accomplished? How is holding period affected by gain
or loss deferral?
Solutions to Chapter 3 Problem Assignments
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1. Choice of Tax Year
Michelle (a calendar-year individual) begins a new business as a sole proprietorship. She
would like to use an
Solutions to Chapter 11 Problem Assignments
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1. Deductions for AGI
Briefly explain two deductions that an individual has for adjusted gross income.
Solution: Educator expenses:
Solutions to Chapter 1 Problem Assignments
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1. Constitutional Authority
When was the constitutional amendment permitting an income tax ratified?
Solution: The 16th amendment to
Solutions to Chapter 7 Problem Assignments
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1. Asset Classification
How are assets classified to determine their tax treatment on disposition? What are other ways
to classify a
Solutions to Chapter 4 Problem Assignments
Update Note: After this text went to print, the IRS issued Announcement 2011-40 (2011-29
IRB 56) increasing the business mileage rate from 51 cents to 55.5 c
Solutions to Chapter 6 Problem Assignments
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1. Basis
Linda inherited a car from her Uncle Ted. Ted purchased the car two years ago for $38,000.
The car had a value of $30,000 a
Solutions to Chapter 10 Problem Assignments
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1. Liability Insulation
Which entities discussed in this chapter insulate the owners from the general liabilities of the
entity?
So
Solutions to Chapter 5 Problem Assignments
Update Note: After this text went to print, the IRS issued Announcement 2011-40 (2011-29 IRB
56) increasing the business mileage rate from 51 cents to 55.5 c
Chapter 2: The Tax Practice Environment 1
Solutions to Chapter 2 Problem Assignments
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1. Tax Planning vs. Compliance
Distinguish tax planning from tax compliance.
Solution: Tax