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Solutions Manual for Federal Income Tax Problems/Solutions 2023
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Solutions Manual for Federal Income Tax Problems/Solutions 2023
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Solutions Manual for Federal Income TaxProblems/Solutions 2023
1) Commuter owns a home in Suburb of City and
drives to work in City each day. He eats lunch in
various restaurants in City.
a)May Commuter deduct his costs of transportation
and/or meals? See Reg §1.162-2(e) -
✔✔ANSW✔✔..a) No these are not deductible b/c
they are regular commuting expenses...not in travel
status
1) Landlord incurs the following expenses during the
current year on a ten-unit apartment complex. Is
each expenditure a currently deductible repair or a
capital expenditure?
a) 500 for painting three rooms of one of the
apartments. - ✔✔ANSW✔✔..i) Currently Deductible
repair/expense
1) Landlord incurs the following expenses during the
current year on a ten-unit apartment complex. Is
each expenditure a currently deductible repair or a
capital expenditure?
,b) $4,000 for replacing the roof over an apartment.
The roof had suffered termite damage -
✔✔ANSW✔✔..i) NPA-- Capital Expenditure or you
could argue the "repair" is currently deductible repair
1) Landlord incurs the following expenses during the
current year on a ten-unit apartment complex. Is
each expenditure a currently deductible repair or a
capital expenditure?
c) $1,000 for patching the entire asphalt parking lot
area. - ✔✔ANSW✔✔..i) Currently Deductible
repair/expense
1) Landlord incurs the following expenses during the
current year on a ten-unit apartment complex. Is
each expenditure a currently deductible repair or a
capital expenditure?
d) $3,000 for adding a carport to an apartment. -
✔✔ANSW✔✔..i) Capital Expenditure
1) Landlord incurs the following expenses during the
current year on a ten-unit apartment complex. Is
each expenditure a currently deductible repair or a
capital expenditure?
,e) $100 for advertising for a tenant to occupy an
empty apartment. - ✔✔ANSW✔✔..i) Currently
Deductible repair/expense... not making the
apartment more valuable, this is more like a
replacement the new investment
1) Lender lends out money at a legal interest rate to
Debtor. Debtor is required to pay $5,000 interest
each year on the loan which extends over a five year
period. The interest is deductible by Debtor under
§163. The agreement calls for payment of each
year's interest on December 31 of the year. Both
parties are calendar year, cash method taxpayers.
Discuss the tax consequences to both parties under
the following alternatives:
a) Debtor mails a check for $5,000 interest to Lender
on December 31, of year one. It is delivered to
Lender on January 2 of year two. - ✔✔ANSW✔✔..i)
Debtor 5k deduction in y1; lender $5 income in y2
1) On January 2 of the current year for $300,000
Depreciator purchases new equipment for use in her
business. The purchase is made from an unrelated
person. The equipment has a 6-year class life and is
5 year-property under §168(c). Depreciator plans to
, use the equipment for seven years, and expects it to
have a salvage value of $30,000 at the end of that
time. Depreciator is a single, calendar year taxpayer,
and she uses the equipment only in her business. In
the following problems compute the depreciation
deductions with respect to the equipment in each
year of its use assuming that if §168(k) is applicable
in the current year Depreciator elects out of its use,
and compute Depreciator's adjusted basis for the
property in each year. -
✔✔ANSW✔✔..DESCRIPTION ONLY
12B 1. Executive has a salaried position with Hi
Rolling Corporation under which she earns $80,000
each calendar year.
12B.1.(a) Who is taxed if Executive, at the beginning
of the year, directs that $20,000 of her salary be
paid to her aged parents? - ✔✔ANSW✔✔..Executive
is taxed for the $20,000 of income. He who earns a
salary is taxed on that salary, generally.
12B 1. Executive has a salaried position with Hi
Rolling Corporation under which she earns $80,000
each calendar year.
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