Individual Income Taxes
43rd Edition
ISBN: 9780357109731
Author: Hoffman
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Question
Chapter 6, Problem 44P
a.
To determine
Compute the effect of Person J’s business on AGI.
b.
To determine
Explain the manner in which answer in requirement a will change if the activity is a hobby.
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Question and my answer is below. Can you help me determine what I have done incorrectly? I believe it may be with the PMT line. I selected 0 because it doesn't say that her payments will be reinvested.
investment you made in a friend’s business. She will pay you $22,809 at the end of this year, $45,618 at the end of next year, and $68,427 at the end of the year after that (three years from today). The interest rate is 11.5% per year.
What is the PV of your windfall?
Financial Calculator:
N = 1 year
I/Y = 11.5% *Note: Only place 11.5 press I/Y; no division or equal sign like mortgage
FV = 22,809
PMT = 0 *Note: Payment here is any additional deposits. It says she pays you, not reinvest)
CPT PV = 20,456.50
b. What is the FV of your windfall in three years?
Financial Calculator:
N = 3 year
I/Y = 11.5% *Note: Only place 11.5 press I/Y; no division or equal sign like mortgage
PV = 68,427
PMT = 0 *Note: Payment here is any additional deposits. It says she pays you, not reinvest)…
Deon is 33 years old. In 2022, he reported an AGI of $11,000, all from his job as a server at the local café. He is single and has no dependents. What amount of earned
income credit may he claim in 2022? (Use Exhibit 8-11)
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B I VS
FE
Gino is a computer programmer who earned $ 45,000 in 2019. But on January 1, 2020 he opened a landscaping business.
At the end of 2020, Gino submitted the information listed below to his accountant.
Use the question facts to calculate Gino's opportunity cost of production and economic profit.
Gino stopped renting out his cottage for $ 3,500 a year and used it as his business premises.
1.
The market value of the cottage increased from$ 92,000 to$ 98,000
2.
3.
He spent $ 30,000 on materials, phone, utilities, etc
4.
He leased machines for $ 15,000 a year.
5.
He paid $ 15,000 in wages.
6.
He used $ 5,000 from his savings account, which earns 5 percent a year interest.
7.
He borrowed $ 20,000 at 10 percent a year from the bank.
8.
He sold $ 240,000 worth of landscaping.
9.
Normal profit is $25,000a year.
Chapter 6 Solutions
Individual Income Taxes
Ch. 6 - Prob. 1DQCh. 6 - Prob. 2DQCh. 6 - Classify each of the following expenditures paid...Ch. 6 - Prob. 4DQCh. 6 - Prob. 5DQCh. 6 - Prob. 6DQCh. 6 - Prob. 7DQCh. 6 - Prob. 8DQCh. 6 - Prob. 9DQCh. 6 - Prob. 10DQ
Ch. 6 - Prob. 11DQCh. 6 - Prob. 12DQCh. 6 - Prob. 13DQCh. 6 - Prob. 14DQCh. 6 - Linda operates an illegal gambling operation....Ch. 6 - Prob. 16DQCh. 6 - Melissa, the owner of a sole proprietorship, does...Ch. 6 - Prob. 18DQCh. 6 - Blaze operates a restaurant in Cleveland. He...Ch. 6 - Prob. 20DQCh. 6 - Prob. 21DQCh. 6 - Ray loses his job as a result of a corporate...Ch. 6 - Lavinia incurs various legal fees in obtaining a...Ch. 6 - Prob. 24DQCh. 6 - Prob. 25DQCh. 6 - Shanna, a calendar year and cash basis taxpayer,...Ch. 6 - Prob. 27CECh. 6 - Maud, a calendar year taxpayer, is the owner of a...Ch. 6 - Vella owns and operates an illegal gambling...Ch. 6 - Printer Company pays a 25,000 annual membership...Ch. 6 - Stanford owns and operates two dry cleaning...Ch. 6 - Tobias has a brokerage account and buys on the...Ch. 6 - Prob. 33PCh. 6 - Prob. 34PCh. 6 - Janice, age 32, earns 50,000 working in 2019. She...Ch. 6 - Prob. 36PCh. 6 - Prob. 37PCh. 6 - Duck, an accrual basis corporation, sponsored a...Ch. 6 - Prob. 39PCh. 6 - Prob. 40PCh. 6 - Prob. 41PCh. 6 - Prob. 42PCh. 6 - Terry traveled to a neighboring state to...Ch. 6 - Prob. 44PCh. 6 - Prob. 45PCh. 6 - Prob. 46PCh. 6 - Prob. 47PCh. 6 - Prob. 48PCh. 6 - Prob. 49PCh. 6 - Prob. 50PCh. 6 - Prob. 51PCh. 6 - Brittany Callihan sold stock (basis of 184,000) to...Ch. 6 - Prob. 53PCh. 6 - Prob. 54PCh. 6 - Prob. 55PCh. 6 - Prob. 56PCh. 6 - Prob. 57CPCh. 6 - Prob. 58CPCh. 6 - Prob. 1RPCh. 6 - Prob. 2RPCh. 6 - Prob. 3RPCh. 6 - Which of the following is a deduction for AGI? a....Ch. 6 - Which of the following is not a deduction for AGI?...Ch. 6 - David is a CPA and enjoys playing the lottery....Ch. 6 - Prob. 4CPACh. 6 - Prob. 5CPACh. 6 - Prob. 6CPA
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