Researching Tax Issues Case Study For this assignment, choose one of the three cases provided in the “Topic 7 Case Studies – Researching Tax Issues” resource and complete the assignment according to the directions provided below for the one case you have selected.
Researching Tax Issues Case Study
Assume you work for an accounting firm and your client has requested a professional memo regarding a tax issue. Your response should be at least 500 words, but it should not exceed three pages. You may use the “Memo Template” resource for this assignment. A tax lien certificate is a certificate of claim against a property that has a lien placed upon it as a result of unpaid property taxes.
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Junk Food Tax and the Growing Obesity Crisis Is “junk food” tax would be beneficial for American citizens because of the addictive nature of junk food and the growing obesity crisis.
Junk Food Tax and the Growing Obesity Crisis
However, the tax might be a financial burden on those who cannot afford healthy food.
In the first paragraph 2-3 sentences introduction remarks required then thesis statement.
The first body paragraph should argument the addictive side of junk food.
The second body paragraph should argument growing obesity crisis due to junk food.
The third body paragraph should argue that tax impose on junk food could be a financial burden
Ultimately, the last paragraph should be the conclusion paragraph which is the summary of the essay.
In every paragraph statistical evidence should be given and at least 3 sources need to be from academic databases. Works cited page is really important.
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The Tax Cut and Jobs Act 2017 Research Paper The changes made by the Tax Cut and Jobs Act, 2017 to the tax provisions have changed the tax rate for 2018 and people are getting a firsthand experience of what it means to them.
The Tax Cut and Jobs Act 2017 Research Paper
Go over the Act and address the questions below:
What are the major changes made to the tax provisions by the Act?
What impact is it likely to have on our GDP and government’s budget?
How have the changes in taxes affected you personally?
Does everyone benefit from the changes in tax provisions or does it favor one group over others?
What changes do you agree and disagree with?
If you had the power to revise the Act, what changes would you make?
Many articles have been written analyzing the Tax Cut and Jobs Act, 2017. Infuse these expert opinions with your own.
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Ippolito Argues Those Federal Tax Policy Instructions: Think about the questions and your answers before you start writing. You MUST use the course materials to support your analysis and conclusions. COURSE MATERIAL FOR EACH QUESTION IS ATTACHED.
Ippolito Argues Those Federal Tax Policy
Please answer Questions 1, 2 and 3. These questions are designed to be broad enough to permit more than one single right answer and reasoned disagreement with course material is always permitted.
Analysis and use of class materials count! I want to know how you think and how you synthesize the course materials (the Instructor)
Using examples from the course materials, explain this statement:
Ippolito Argues Those Federal Tax Policy
When policy-makers decide to change the economy or society’s behavior, the tax code is usually their tool of choice.
Give a good number of examples. (hint: one big example is tax preferences)
Ippolito argues that federal tax policy should be analyzed in the budget policy context emphasizing the relationship between 4 key factors: revenue, spending, deficits, and debt. Using the course materials, explain how different presidential administrations have interpreted the relative importance of these four factors in formulating tax policy to influence economic growth and budgetary policy. Refer to at least three presidential administrations in your answer. (AT LEAST 6 PAGES)
Using the materials FROM WEEK 3 and the GAO Tax Expenditure Policy Evaluation Sheet, select any tax expenditure and asses the tax expenditure’s effectiveness. Make a recommendation about the merits of its continued inclusion in the tax expenditure budget. (AT LEAST 3 PAGES)
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What is NOT included in their income? Go through the info and determine what is included and what is not included!
Figure out their income and do a tax return using 2018 tax forms.
They had medical insurance the whole year. No penalty!
Yes everything happened is listed, but NOT everything goes on their tax return.
Mark Smith (1/1/1975) and Sally Smith (1/2/1974) have hired you to do their 2018 income tax return. They live at 10210 Old Main Street in Mount Olive. His social security number is 111-11-1111 and hers is 222-22-2222. They have several people they take care of: Joshua (1/3/1998), their son, is 20 and a full time college student-a junior; His social security number is 333-33-3333 and he earned $2,700 last year. He lives on campus but he paid for that himself, but his parents paid for his tuition at UMO. Benjamin (1/4/1993), their son, is 25 and fully disabled and his social security number is 444-44-4444. He earned $5,000 and lives with the Jackson’s. Their daughter Rachel (1/5/2013) is 5 and her social security number is 555-55-5555. They paid The ABC Day Care in Mount Olive $6,000 to help watch and care for Rachel while they work. Their Federal tax id is 52-9876543. They also take care of and fully support Mark’s mother-Melanie Smith (1/10/1950) in Florida and her social security number is 666-66-6666. They also fully support Sally’s cousin, Monica Jackson (1/9/1980), which lives in California. Her social security number is 777-77-7777. You must figure out the number of dependents!(DOB in parentheses)
Mark has a salary job working at the University of Mount Olive as a professor making $85,000 and they withheld $8,000 in federal income taxes and $4,000 in state income taxes. Mark paid alimony of $12,000 and child support of $6,000. Sally received alimony of $6,000. Both of them have pre-2018 alimony agreements (This should tell you something!) Mark and Sally have rental property and Sally is a local Business owner.
The family had health insurance coverage the entire year. No penalty to calculate.
The rental info is:
House in Florida. They have rented the house in 9 previous years (began 1/1/2010) and they rented in out all year. The house is worth $100,000 and the land is $50,000 for a total of $150,000. Income and Expenses listed below.
They have a 2nd rental in South Carolina that only rented for 13 days and the income was $5,000 with no expenses. They have rented this property for 7 years and it was purchased for $100,000 with land valued at $25,000.
Income from FL: $20,000
Advertising $1,200
Mortgage interest paid $6,000
Real estate taxes $2,400
Utilities $1,400
Insurance $1,800
Repairs $2,300
Management fees $1,200
Business Information on Sally
Sally’s business income for the year was $40,000. She had the following expenses:
Liability insurance $1,800
Software rental $9,500
Journals $1,250
Training $1,500
Advertising $2,400
Supplies $3,400
Postage $1,200
Cellphone $2,400
Website $2,000
Her purchases in January 1, 2018 of property are as follows:
Computer 5 year $2,000
Office Furniture 7 year $5,000
Also, she brought an office condo on January 1, 2012. She brought it for $100,000, $70,000 for the building and $30,000 for the land.
She elected: NO BONUS and NO Section 179.
Here are some other events that happened in the life of the Smith’s this year:
Reminder everything happened is listed, but NOT everything goes on their tax return!
Hint-Go through the information and delete out what does apply to their tax return! Then input everything else!
Received interest from Bank of America of $1,800.
Received tax exempt interest of $1,700 from the State of North Carolina.
Received dividends from Ford Motor Co. of $2,400.
Mark did jury duty and received $50.
Mark’s uncle died and the insurance company left him $500,000.
When his uncle died he also left Mark some ABC co. stock which he purchase for $2,000 back in 1988. The stock had a FMV of $20,000 on the date of death 7/1/18. Mark sold it for $30,000 on 12/31/18.
Mark purchase some stock in February 28, for $17,000 and it was going south, so he sold it in October 31, for $1,000.
Mark sold one old car for a loss of $2,000.
Sally had gambling winning s of $7,000. She also has gambling losses of $9,500.
Medical insurance premiums paid were $12,000 by Mark on his job.
Therapist bills for Benjamin were $500
Other Doctor and dentist bills were $3,000
Over the counter medicine purchased was $2,800
Mortgage interest paid on their home was $6,000
They paid $8,000 interest on their personal auto loan.
They paid $1,800 for prescriptions.
Real Estate taxes paid on their home was $3,800
The paid personal property taxes of $500 and it was based on value of property so include it.
They gave $12,500 to charity/church and have a statement.
They paid credit card finance charges of $3,000
They made political donations of $5,000
They paid $1,000 for tax preparation last year. $600 was for Sally’s business.
Mark paid union dues of $1,500
Mark also had job expenses of $3,000 that he paid out of pocket-not reimbursed.
Mark helped out a friend at work by giving him $3,500. He wants to know if its charity?
Sally paid for the medical expenses of a close friend $5,000.
Mark gave another old car to charity. FMV was $500 on 1098C.
Mark elected to put $5,000 in a Traditional IRA. Sally elected to put $5,000 into a ROTH IRA. Neither has a retirement plan thru an employer.
Mark paid $4,000 to Sallie Mae for student loan interest.
They withdrew a bank CD and paid an early withdrawal penalty of $75.
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From your research on Section 8 give the history of section 8 and the earned income tax credit making cash and housing available to combat/ reduce hardship on the working poor/ underclass.
This is my Running Head: POVERTY MECHANISM FOR THE MODERN FAMILY
Abstract
In this paper, I will be discussing the history of section 8 voucher and the earned income tax credit on making money including the housing available to combat, reducing hardship on the working poor and underclass.
Today’s Poverty Mechanism for the Modern Family
Gabriella D.
WCC
SOC 102 – Marriage and the Family
Abstract
In this paper, I will be discussing the history of section 8 voucher and the earned income tax credit on making money including the housing available to combat, reducing hardship on the working poor and underclass. I
Today’s Poverty Mechanism for the Modern Family
References
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Income Tax Implication of Capital Investment Decision
IncomeTax Implication of Capital Investment Decision
Read the following case study:
The Whitley Corporation’s year-end is December 31, 2013. It is now October 1, 2013. The Whitley management team is taking a look at the prior nine months and attempting to make some short-term strategy decisions.
Whitley has experienced steady growth over the five preceding years. The result has been a steadily increasing EPS. Last year, Whitley reported an EPS of 1.95.
This year, owing to a mild recession, Whitley’s sales have fallen off. Management is looking for strategies that can improve the appearance of the financial statements. At the same time, there is a need for new equipment in the plant. Despite the recession, Whitley has enough cash to make the purchase.
Based on the year’s performance to date and extrapolation of the results to year-end, management feels that the pretax financial accounting income for the year will be $200,000. Transactions from prior years have resulted in a deferred tax asset of $15,000 and a deferred tax liability of $70,000 at the beginning of 2013. The temporary difference of $37,500 that resulted in the deferred tax asset is expected to completely reverse by the end of 2013. The deferred tax liability resulted totally from temporary depreciation differences. There will be a pretax reversal of $42,500 in this temporary difference during 2013.
Based on currently enacted tax law, the purchase of the equipment will result in a future taxable amount of $50,000. Whitley management feels that it can wait four to six months to purchase the machine. Whitley’s tax rate is 40 percent.
Write a response of 700 to 1,050 words to the following:
Determine the projected amount of income tax expense that would be reported if Whitley waits until next year to purchase the equipment.
Determine the projected amount of income tax expense that would be reported if Whitley purchases the equipment in 2013.
Explain why Whitley should/shouldn’t wait to purchase the equipment. Your answer should take into consideration the expected financial statement effects, as well as the effect on EPS. Support your conclusions with pro forma data. The number of shares that Whitley will use to calculate EPS is 55,500.
Determine the ethical considerations of this case.
In Year 1, Riley is a little into the 37% tax bracket with her salary from her job as a hedge fund manager. During the taxable year, she enters into the following transactions. She disposed of General Electric stock for $100,000 that she had purchased for $50,000 three years earlier. She sold a specialized military medals collection for $50,000 that she had received as a gift from her Uncle Joe 12 years earlier (Uncle Joe had a basis of $8,000 in the collection, and the fair market value at the date of transfer was $20,000). She also disposed of Amazon stock for $50,000 that she had purchased 9 months earlier for $40,000, and BP stock that she had purchased for $20,000, held for 10 months and was sold for $25,000. She sold an investment wine collection for $2,000 that she had purchased for $70,000 two years earlier (improper storage turned many of the vintage bottles skunky, a true wine tragedy). Finally, she received $15,000 in dividends from the GE stock, which is Qualified Dividend Income for Code purposes.
What is the first step needed to be taken in order to analyze this fact pattern?
a) Calculate the income from each asset.
b) Determine what tax bracket Riley is in.
c) Sort assets into categories.
d) Determine what is ordinary income, and what is capital gain.
e) Determine what is and is not income.
f) Determine allowable losses.
g) Calculate the gain from each asset.
h) Sort assets into capital and non-capital assets.
i) Sort gain into categories.
j) None of the above. Explain: ____________________________________
What is the second step?
a) Calculate the income from each asset.
b) Calculate the tax bracket Riley is in.
c) Sort assets into categories.
d) Determine what is ordinary income, and what is capital gain.
e) Determine what is and is not income.
f) Determine allowable losses.
g) Calculate the gain from each asset.
h) Sort assets into capital and non-capital assets.
i) Sort gain into categories.
j) None of the above. Explain: ____________________________________________________________________________________________
What is the third step?
a) Calculate the income from each capital asset.
b) Determine what tax bracket Riley is in.
c) Sort assets into categories.
d) Determine what is ordinary income, and what is capital gain.
e) Characterize the income as ordinary or capital gain for 1(h)(11).
f) Determine allowable losses.
g) Establish if any of the transactions involve capital assets.
h) A & B.
i) E & G.
j) None of the above. Explain: _______________________________________________________________________________________
How much is Riley’s Gross Income?
a) 100,000
b) 32,000
c) 17,000
d) 105,000
e) 95,000
f) 110,000
g) 107,000
h)122,000
i) 120,000
j) None of the above. Explain: ______________________________________
How much is the gain on the GE Stock?
a) 100,000
b)50,000
c)122,000
d)98,000
e)105,000
f) 102,000
g) 102,500
h) None of the above. Explain: her gain is 65000 because 15,000 dividends and her 50000 gained in selling the stuck
How much is the gain on the medals?
a) 8,000
b) 20,000
c) 42,000
d) 50,000
e) 10,000
f) 32,000
g) None of the above. Explain: __________________________________
What is the basis of the medals collection, and on what Code section is your answer based?
a) 8,000
b) 20,000
c) 42,000
d) 50,000
e) 10,000
f) 18,000
g) None of the above. Explain: _________________________________
Code Section ___________________________
What is the gain on the Amazon Stock?
a) 50,000
b) 10,000
c) 40,000
d) 25,000
e) 20,000
f) 22,000
g) None of the above. Explain: __________________________________
What is the gain on the BP stock?
a) 20,000
b) 25,000
c) 15,000
d) 30,000
e) 5,000
f) 10,000
g) None of the above. Explain: _________________________________
What is the gain on the wine collection?
a) 20,000
b) 68,000
c) 70,000
d) 2,000
e) 72,000
f) 74,000
g) None of the above. Explain: actually it is a lost since she is origionally paid 70,000 and only sold it for 2000
Are there any capital assets in these transaction?
a) GE stock
b) medals collection
c) Amazon stock
d) BP stock
e) wine collection
f) Qualified Dividends
g) A, B, C, D, E, & F
h) A, B, C,D, E
i) A, B, C, D
j) A, C, D
What is the significance of a capital asset?
a) It generates income under 61(a)(3)
b) A capital gain or loss is generated from the sale of a capital asset
c) Ordinary income excludes gains from capital assets
d) It triggers the application of 1(h)
e) It excludes the application of 1(h)
f) It signals gross income
g) It disallows losses from personal consumption
h) It generates ordinary income
i) All of the above.
j) None of the above: Explain: _____________________________________
a) Since she is already in the 37% rate category, no 0 rate is available to her, so all her ANCG is taxed at 15%.
b) Riley gets to reduce her income by a further $48,000 in deductions.
c) Riley gets to deduct $102,000 in expenses.
d) Riley is in the trade or business of managing her own stocks, so she gets to take the ordinary and necessary expenses attached to her trade or business.
e) b & d
f) c & d
g) all of the above.
h) None of the above. Explain: _____________________________________
Amount taxed at 0%: _________________________________
Amount taxed at 15%: _________________________________
Amount taxed at 20%: ________________________________
Amount taxed at maximum 25%: ____________________________
Amount taxed at maximum 28%: ___________________________
Using the same facts listed above, add in that Riley also sold XYZ stock in the same year. She had purchased it as an investment for $160,000, sold it for $20,000, and held it for 13 months.
What does your answer look like if you amend the original fact pattern to say that Riley earns no salary or other income during the year except the listed transactions?
Estate Planning Tax Advice and Cash Assets Ellis and Sandra, an elderly couple, come to you for some tax planning advice. They have $7,000,000 in cash assets and 4 children, 12 grandchildren and 21 great-grandchildren.
Estate Planning Tax Advice and Cash Assets
They want to establish a device that will hold their assets for the benefit of their children. For estate tax planning reasons that I do not want you to worry about or consider in this assignment, they want to set up a trust or company that will manage their $7,000,000. They want the ownership of the assets to be divided among all of their descendants. Essentially, they will put all of the money into an entity and the ownership of the entity will be owned in essentially equal shares by all 37 of their beneficiaries. Ellis and Sandra tell you that they are considering a few different possible strategies 1) Setting up a trust to hold their money with all of their descendants as trust beneficiaries who will be entitled to the income generated by their shares of the trust and will be entitled to withdraw their shares in certain emergency cases. 2) Setting up a limited partnership or LLC to hold the money and gifting shares of the entity to all of their descendants. 3) Setting up a corporation to hold the money and gifting shares of the entity to all of their descendants. You ask them whether they mean a c-corp or an s-corp but they look at you blankly. They don’t have any idea what the difference is. Since Ellis and Sandra have already hired another firm to work out transfer tax issues, they only want from you an analysis of the income tax ramifications of these possible plans. Please write a letter to Ellis and Sandra of approximately 500-750 words (this is a ballpark figure, but please stick to something close to that guideline), explaining the income tax advantages and disadvantages to the family as a whole of each plan. Also, please recommend one of these three plans and explain why.
Taxation Law Research Assignment Guidelines Description Research Assignment Guidelines
(see also subject outline for further information )
Please note:
Taxation Law Research Assignment Guidelines
-As this is a research assignment, students are expected to go beyond the course
materials and to conduct independent research in order to answer the assignment
question.
-The content in the lecture topics listed in weeks 1 to 8 (see the program on page 3 of
the subject outline) will also provide useful guidance in relation to the assignment.
-Students are not required to address possible issues in relation to the lecture topics
listed in weeks 9-12 of the subject outline (except to the extent that there is any
overlap with lecture topics in weeks 1 to 8).
-Students are required to follow HIRAC to address the key issues arising from the
facts eg, “Is the [$x] expense incurred, deductible to Sarah under s8-1, ITAA97?”, “Is
the [$y] amount/benefit received, included in Sarah’s assessable income?” etc
-Students should identify the relevant key cases, legislation, tax rulings and
principles of tax law, in relation to each key issue.
-Students should also include any relevant calculations of the assessable or
deductible amount regarding each particular key issue, however, students are not
required to calculate the overall income tax payable by the taxpayer for the income
year.
-Students may assume, as per the facts, that Sarah is an Australian resident for tax
purposes. Accordingly, there is no need to discuss tax residency.
Structure/format
-Make sure you follow the HIRAC methodology (see “Concise Guide to Answering
Tax Law Problem Questions” and “Example illustrating HIRAC methodology” on
UTSOnline)
-Use separate headings for each relevant key issue eg, “Is the [$x] expense
incurred, deductible to Sarah under s8-1, ITAA97?
-Maximum word limit is 1500 words (excluding references), students must not
deviate from the word limit by more than 10%
-Use at least 11 point font size (use one consistent font – Arial 11 or Times New
Roman 12)
Referencing
-Make sure you include case citations for any cases referred to in your response
eg, Brent v FCT (1971) 125 CLR 418
Case citations may be found easily in the Prescribed Textbook (see Table of Cases
at the back of the textbook) or on the Lexis Advance Pacific database which can be
accessed via the UTS Library website
-Make sure you refer to any relevant specific sections of legislation for each key
issue
eg, s6-5, Income Tax Assessment Act 1997 (Cth)
-Referencing style should be consistent throughout the response. For this
assignment, students may use either:
AGLC (see links below):
http://www.lib.uts.edu.au/help/referencing/aglc-guide
https://law.unimelb.edu.au/mulr/aglc/about
or alternatively
UTS Harvard referencing (see http://www.lib.uts.edu.au/help/referencing/harvarduts-referencing-guide )
Taxation Law: Research Assignment (40%)
Word limit: 1500 words maximum (excluding references)
Due Date: The assignment must be submitted both in hard copy to Law Reception
(Level 3, CB05B) and online via UTSOnline by 5 pm on Tuesday 5 February 2019.
Facts:
Sarah is a full-time interior design consultant employed by a large interior design firm
DesignCo Ltd. She is an Australian resident for tax purposes. Sarah’s main duties
are to provide advice to clients, and to develop functional and aesthetically enhancing designs for the interior of buildings. DesignCo Ltd pays Sarah a salary of
$80,000 per year.
DesignCo Ltd provides Sarah with a laptop computer to use for her work, however,
does not provide Sarah with an office. She lives in Strathfield where she uses a
spare room at home as her home office which is the base of her consulting
operations, where she prepares advice and designs for clients. The home office
takes up about 20% of the floor area of the house. She spends 60% of her time in
the home office on design work and 40% of her time in the home office chatting on
the phone with her friends. During the 2017/18 year, Sarah incurs expenses of
$30,000 for interest on her home loan, $3,000 for insurance and $7,000 for lighting
and electricity for the entire house.
On 1 August 2017, Sarah paid $9,000 (GST exclusive) for a new piece of design
equipment for her home office. The design equipment has an effective life of nine (9)
years. From 1 August 2017, Sarah uses the equipment 60% for preparing designs
for clients, and 40% for designing a new kitchen for herself, which she plans to build
in the future.
For the 2017/18 year of income, she pays $700 membership fees for her
membership of the Interior Designers Association of Australia, and $500 for
subscriptions to Interior Design journals.
Sarah is occasionally required to travel to client premises to provide on-site advice
and inspect the interior of buildings and afterward she travels directly home from
the client’s offices. During the 2017/18 year of income, she incurs travel expenses of
$4,000 in traveling from home to client premises and back home again. She is
required, by her employer, to wear “all black” clothing when meeting with clients.
During the 2017/18 year of income, she spends $700 on “all black” skirts, trousers,
and tops to wear to client meetings.
Sarah is very hardworking and in addition to her full-time job, she also teaches art
classes at a community college in Newtown during the week, in the evenings. She travels
from home to the college in Newtown to teach, and afterward she travels
directly home from the college. During the 2017/18 year of income, she incurs travel
expenses of $5,000 in traveling from home to the college in Newtown and back
home again. She receives $25,000 from teaching at the college during the 2017/18
income year.
In July 2017, Sarah also commenced a Master of Business Administration (MBA)
degree at university, as she hopes to move into a management role (and away from
an interior design role) in the future. During the 2017/18 year of income, she incurred
$6,000 for course fees and $700 for textbooks.
In January 2018, while exploring the new year sales, Sarah came across a good
bargain and purchased a 120-year old, antique bedroom furniture set (comprising a
bed, 2 bedside tables and a chest of drawers) for $1,550 ($450 for the bed, $350 for
each bedside table, and $400 for the chest of drawers). She negotiated with the
vendor to buy each piece of the set separately. A few weeks later she received an
offer of $4,400 for the set. She negotiated with the purchaser to sell each item
separately ($2,000 for the bed, $700 for each bedside table, and $1,000 for the chest
of drawers).
Required:
Advise Sarah regarding the tax implications to her, arising from the above
facts, in relation to the 2017/18 year of income. In your answer, make sure you
consider the potential assessability for income tax purposes to Sarah of any of
the above events, and the availability of a tax deduction for any expenses
incurred. Also, make sure that you apply the HIRAC methodology and refer to
any relevant cases, legislative provisions, tax rulings and principles of tax law.
(40 marks)
