MUL'I1PLE CHOICE QUES'HONS Select the single best answer for each of the questions below. Record your answer in the appropriate location on the...
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MUL'I1PLE CHOICE QUES'HONS Select the single best answer for each of the questions below. Record your answer in the appropriate location on the answer packet. Pts 16. Floyd, a cash basis taxpayer, sold land in which he had a basis of $10,000, for $100,000. He received $25,000 on January 1 of the year of the sale. On December 31 of the year after the sale he received a payment of $75,000 plus interest on that amount at 8% per year. How much income must Floyd report in total on this sale in the second year? $102,480. $87,480. $79,980. $12,480. For questions 17 and 18, refer to the case, Wal—Mart Stores, Inc. and Subsidiaries v. CIR (73 TCM 1625; TC Memo 1997-1). For the 1983 and 1985 tax years, what was the total amount of additional income tax imposed by the CIR? $31,610,388. $19,319,171. $53,705,001. $44,671,834. For the 1983 and 1985 tax years, by how much did the taxpayer understate taxable income according to the IRS? $31,610,388. $19,319,171. $53,705,001. $44,671,834. What is the main tax concept (not the metaphor) that we discussed in class, with respect to the “sole question for decision” in the case of Guy T. Helvering v. Paul R. G. Horst (40-2 USTC 119787). Fruit and the tree. Tax-free recovery of basis. Assignment of income. Wherewithal to pay. According to the rulings in Fox v. CIR (61 TC 704) and Jones v. CIR (90-1 USTC 150,280), the Commissioner may reconstruct a taxpayer’s taxable income. If the taxpayer fails to maintain adequate accounting records. Using any reasonable means. When the taxpayer does not prove that the CIR’s method was arbitrary and erroneous. All of the above. A and C, above.

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Subject: Accounting, Business
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