Many newly created businesses are established using a tax status

Many newly created businesses are established using a tax status that avoids the double tax that applies to C corporations and their owners. Calculate the percentage of entities that filed income tax returns as C corporations (Form 1120), S corporations (Form 1120S), and partnerships and other flow-through entities (Form 706) for the most recent year for which data are available. Use data from the IRS Tax Statistics as the basis for your calculations. Compare your findings with comparable percentages for the third and fifth prior years. Using Microsoft Excel, create graphs that illustrate the results of your research. Be sure the graphs have proper labels and explanations.

Kurstie received a $800 state income tax refund this year.

Kurstie received a $800 state income tax refund this year. Kurstie deducted $3,000 of state income taxes paid in the prior year as part of her itemized deductions. Which of the following statements regarding the taxability of Kurstie’s refund is true?
a. If Kurstie’s itemized deductions exceeded the standard deduction by $200, then die $800 refund is included in gross income.
b. If Kurstie’s itemized deductions exceeded the standard deduction by $200, then $200 of the refund is included in gross income.
c. If Kurstie claimed the standard deduction instead, then the $800 refund is taxable.
d. Kurstie must include $3,000 in gross income in die current year.

Use information about individual income tax returns available at the

Use information about individual income tax returns available at the IRS Tax Stats website (irs.gov/statistics/soi-tax-stats-individual-income-tax-returns) to find data on the number of individuals who report tax-exempt interest income on their tax return and the amount of that exempt income. The data you find should show this information for individuals at different ranges of adjusted gross income (AGI). Use the data to create pie charts (or similar visuals) of the percent of AGI represented by the tax-exempt interest income exclusion as well as the number of individuals claiming this exclusion at different AGI levels. Analyze the IRS data, draw conclusions from it, and summarize your findings in a two- to three-paragraph e-mail sent to your instructor. Be sure your conclusions are explained and supported by the data.

Find the text of various tax treaties currently in force

Find the text of various tax treaties currently in force in the United States. In an e-mail to your instructor, address the following items.

a. How does the U.S income tax treaty with Germany define “business profits” for multinational businesses?

b. How does the U.S. income tax treaty with Japan treat the FIRPTA provisions?

c. List five countries with which the United States has entered into an estate tax treaty.

d. What is the effective date of the latest income tax treaty with the United Kingdom?

e. List five countries with which the United States does not have in force a bilateral income tax treaty.

For your state and one of its neighbors. find the

For your state and one of its neighbors. find the following income tax rules. Place your data in a chart, and e-mail your findings to your instructor.

a. To what extent does each state follow the rulings of the Multistate Tax Commission?

b. Does the state adopt pertinent changes to the Internal Revenue Code? If so, as of what date?

c. What is the highest income tax rate for corporations?

d. Is the tax effectiveness of a passive investment company limited in some way? Has the state adopted the Geoffrey approach to the taxation of income from intangibles? Explain.

e. Does the state apply entity-level income taxes for S corporations, partnerships. and LLCs? If so, what arc the terms of those taxes?

Ashley Panda lives at 1310 Meadow Lane, Wayne, OH 43466,

Ashley Panda lives at 1310 Meadow Lane, Wayne, OH 43466, and her Social Security Tax Computation Problem number Ls 123-45-6789. Ashley Ls single and has a 20-year-old son. Bill. His Social Security number is 111-11-1112. Karl lives with Ashley, and she fully supports him. Bill spent 2018 traveling in Europe and was not a college student. He had gross income of $4,655 in 2018. Bill paid $4,000 of lodging expenses that Ashley reimbursed after they were fully documented. Ashley paid the $4,000 to Bill using a check from her sole proprietorship. That amount Ls not included in the items listed below. Ashley had substantial health problems during 2018, and many of her expenses were not reimbursed by her health insurance.

Ashley owns Panda Enterprises LLC (98-7654321), a data processing service that she operates as a sole proprietorship. Her business is located at 456 Hill Street, Wayne, OH 43466. The business activity code is 514210. Her 2018 Form 1040, Schedule C for Panda Enterprises show’s revenues of $315,000, office expenses of $66,759, employee salary of $63,000, employee payroll taxes of $4,820, business meal expenses (before the 50% reduction) of $22,000, and rent expense of $34,000. The rent expense includes payments related to renting an office ($30,000) and payments related to renting various equipment ($4,000). There is no depreciation because all depreciable equipment owned has been fully depreciated in previous years. No fringe benefits are provided to the employee. Ashley personally purchases health insurance on herself and Bill. The premiums are $23,000 per year.

Ashley has an extensive stock and has prepared the following analysis:

Ashley had $800 of interest income from State of Ohio bonds and $600 of interest income on her Wayne Savings Bank account. She paid $25,000 of alimony to her former husband. His Social Security number is 123-45-6788. Ashley itemizes her deductions and provides the following information, which may be relevant to her return:

Ashley made a $26,000 estimated Federal income tax payment, does not want any of her taxes to finance presidential elections, lias no foreign bank accounts or trusts, and wants any refund to be applied against her 2019 taxes.

Compute Ashley’s net tax payable or refund due for 2018. If you use tax forms for your computations, you will need Form 1040 and its Schedules A, C, D, and SE and Form 8949- Ashley qualifies for the § 199A deduction for qualified business income. Be sure to include that in your calculations.

Justin Stone was an employee of DataCare Services, Inc. His

Justin Stone was an employee of DataCare Services, Inc. His salary was $45,000 through November 10, 2018, when he was laid off. DataCare Services provided medical insurance for Justin and his family during hLs employment and agreed to continue tills coverage through tile end of 2018. He received $7,000 of unemployment compensation from November 11, 2018, through December 31, 2018. FICA witliholdings were as follows: Social Security of $2,790 ($45,000 X 6.2%) and Medicare of $653 ($45,000 x 1.45%). Justin lives at 112 Green Road, Crown City, OH 45623- His Social Security numlier Is 111-11-1112. Justin owned an apartment building until November 22, 2018, when he sold it for $200,000 (the apartment building’s address Is 4826 Orange Street, Crown City, OH 45623). For 2018, he had rent revenue of $33,000. He incurred and paid expenses as follows: $4,568 of repairs, $12,000 of mortgage interest, $10,000 of real estate taxes, and $1,000 of miscellaneous expenses. He purchased the building on January 2, 2012, for $125,000. The building generated an operating profit each year that Justin owned it. Justin received $13,000 in cash as a gift from his mother to help “tide him over” while he was unemployed. He also withdrew $10,000 from his checking account. He ’ invested” $300 in lottery tickets during the year but had no winnings. Other information follows:

  • On November 22, 2018, Justin sold for $3,500 equipment that had been used for repairing various items in the apartments. The equipment was purchased for $25,000 on July 10, 2011, and was fully depreciated prior to 2018.
  • Justin has $3,000 of un-recaptured § 1231 losses from prior years.
  • Justin Is age 38; Is single; is divorced; and has custody of his nine-year-old son, Flint.
  • Justin provides more than 50% of Flint s support. Flint’s Social Security number is 123-45-6789.
  • Justin had $1,000 interest income from Blue bonds.
  • Justin had $1,500 interest income from a State Bank certificate of deposit.
  •  Justin had a $2,OCX) 0%/15%/20% long-term capital gain from the Brown Stock Investment Fund.
  • Justin had the following itemized deductions: $4,600 real estate taxes on his home; $8,900 mortgage interest on his home; $4,760 charitable contributions (all in cash, all properly documented, and no single contribution exceeding $25); $4,300 slate income tax withholding during 2018; $2,000 state estimated income tax payments during 2018; $2,600 sales taxes paid.
  • Justin does not want to donate to the Presidential Election Campaign Fund.
  • He had $10,000 of Federal income tax withholding during 2018 and made total Federal estimated income tax payments of $12,000 during 2018.
    Compute Justin’s 2018 net tax payable or refund due. Ignore the § 199A deduction for qualified business income (if applicable). If you use lax forms for your computations, you will need Form 1040 and Schedules A, B, D, and E. You will also need Form 4797.

Phil and Susan Hammond are married taxpayers filing a joint

Phil and Susan Hammond are married taxpayers filing a joint return. The couple have two dependent children. Susan has wages of $34,000 in 2017. Phil does not work due to a disability, but he is a buyer and seller of stocks. He generally buys and holds for long-term gain, but occasionally gets in and out of a stock quickly. The couple’s 2017 stock transactions are detailed below. In addition, they have $2,300 of qualifying dividends.

a. What is Phil and Susan’s AGI?
b. Complete a Form 8949 for the Hammonds (Phil’s Social Security number is 123-45-6789). Assume that the stock sale information was reported to die Hammonds on a Form 1099-B and that basis information was provided to the IRS.

Larry is the sole proprietor of a trampoline shop. During

Larry is the sole proprietor of a trampoline shop. During 2018, the following transactions occurred:

  • Unimproved land adjacent to the store was condemned by the city on February 1. The condemnation proceeds were $15,000. The land, acquired in 1986, had an allocable basis of $40,000. Larry has additional parking across the street and plans to use the condemnation proceeds to build his inventory.
  • A truck used to deliver trampolines was sold on January 2 for $3,500. The truck was purchased on January 2, 2014, for $6,000. On the date of sale, the adjusted basis was zero.
  • Larry sold an antique rowing machine at an auction. Net proceeds were $4,900. The rowing machine was purchased as used equipment 17 years ago for $5,200 and is fully depreciated.
  • Larry sold an apartment building for $300,000 on September 1. The rental property was purchased on September 1, 2015, for $150,000 and was being depreciated over a 27.5-year life using the straight-line method. At the date of sale, the adjusted basis was $124,783.
  • Larry’s personal yacht was stolen on September 5. The yacht had been purchased in August at a cost of $25,000. The fair market value immediately preceding the theft was $19,600. Larry was insured for 50% of the original cost, and he received $12,500 on December 1.
  • Larry sold a Buick on May 1 for $9,600. The vehicle had been used exclusively for personal purposes. It was purchased on September 1, 2014, for $20,800.
  • Larry’s trampoline stretching machine (owned two years) was stolen on May 5, but the business’s insurance company will not pay any of the machine’s value because 
  • Larry failed to pay die insurance premium. The machine had a fair market value of $8,000 and an adjusted basis of $6,000 at the time of theft.
  • Larry had AGI of $102,000 from sources other than those described above.
  • Larry has no non-recaptured § 1231 look back losses.

a. For each transaction, what are die amount and nature of recognized gain or loss?

b. What is Larry’s 2018 AGI?

Identify three states considered to be in the same economic

Identify three states considered to be in the same economic region as your own. For each of the three states, answer the following questions. Answers to most can be found at www.taxadmin.org.

  • What is the overall tax burden per capita, where does it rank among all states?
  • What is the overall tax burden as a percentage of personal income, and where does it rank among all states?
  • From what source(s) does it raise most of its revenues (e.g.. sales/use tax, high way tolls)?
  • What is the highest marginal tax rate on corporate income?
  • What is its apportionment formula, including factors and weights?

Summarize your findings in a Microsoft Excel spreadsheet, and submit it to your instructor.