Reference no: EM131268058
Jane, age 65, who lives with her unmarried son, Jack, received $7,000, which was used for her support during the year. Her sources of support were as follows: Social Security Benefits $1,500 Jack 2,600 Carol, an unrelated friend 800 Dwayne, Jane’s son 500 Emma, Jane’s sister 1,600 Total $7,000 a. Who is eligible to claim Jane as a dependent? b. What must be done before Jack can claim the exemption? c. Can anyone claim head-of-household status based on Jane’s dependency exemption? Explain. d. Can Jack claim an old age allowance for his mother? Explain
|
Each asset is transferred subject to the liability
: Walter swaps his warehouse for Sally’s office building, and the exchange qualifies as a like-kind exchange. Walter’s adjusted basis for the warehouse is $500,000 and the warehouse is subject to a liability of $150,000. The FMV of Sally’s office build..
|
|
Depreciation deductions-gain or loss on the sale
: Doris acquired a machine at a cost of $30,000 for use in her business, and she placed it in service on April 1, 2014. The machine is depreciated under MACRS, with a 7-year recovery period. This machine was the only asset Doris purchased this year. Ca..
|
|
Long term capital gain or long term capital loss on sale
: Wanda owns a non-depreciable capital asset she has held for investment. She purchased the asset for $200,000 six years ago, and it is now subject to a $54,000 liability. Calculate the amount of Wanda’s Long Term Capital Gain or her Long Term Capital ..
|
|
Using the percentage-of-completion method
: In spring 2015, Parmac Engineering Company signed a $1,000,000 contract with the city of Parkersburg, to construct a new city hall. Parmac expects to construct the building within two years and incur expenses of $600,000. Using the percentage-of-comp..
|
|
What must be done before jack can claim the exemption
: Jane, age 65, who lives with her unmarried son, Jack, received $7,000, which was used for her support during the year. Her sources of support were as follows: Social Security Benefits $1,500 Jack 2,600 Carol, an unrelated friend 800 Dwayne, Jane’s so..
|
|
Straight-line method of amortization for bond premium
: Flounder Company issued $612,000 of 9%, 20-year bonds on January 1, 2017, at 101. Interest is payable semiannually on July 1 and January 1. Flounder Company uses the straight-line method of amortization for bond premium or discount. Prepare the journ..
|
|
Cash basis taxpayer-leases lawn and garden equipment
: Firm B, a calendar year, cash basis taxpayer, leases lawn and garden equipment. During December, it received the following cash payments. To what extent does each payment represent current taxable income to Firm B?
|
|
Concerning window dressing for cash
: By preparing a four-column bank reconciliation ("proof of cash") at year-end, an auditor will generally be able to detect: Which of the following is correct concerning "window dressing" for cash? Which of the following procedures in the cash disburse..
|
|
Financing leases with unguaranteed residual value
: Steven Truck Company has been an 80%-owned subsidiary of Paulz Heavy Equipment since January 1, 2013, when Paulz acquired 128,000 shares of Steven common stock for $832,000, an amount equal to the book value of Steven’s net assets at that date. Prepa..
|