For purposes of the Net Investment Income (NII) calculations: A) Category 2 income can be reduced...
For purposes of the Net Investment Income (NII) calculations:
A) Category 2 income can be reduced by a Category 1 loss.
B) Category 2 income can only be earned by a material participant in the business.
C) category 2 income may be a net loss or net income.
D) The active participant does not include in Category 3 income gain from the sale of trade or business equipment for the active participant in the business.
Homework Answers
SOLUTION IS- OPTION 'B'
It is because the second category is for passive income that is not already included in the first and last category. This category would include income from a trade or business that the taxpayer does not materially participate in.
Add Answer to:
For purposes of the Net Investment Income (NII)
calculations:
A) Category 2 income can be reduced...
Which of the following is NOT a category of effectively connected income for which a foreign...
Which of the following is NOT a category of effectively connected income for which a foreign owned U.S. trade or business must pay U.S. income tax? a. U.S. source income. b. Foreign-source income attributable to a U.S. office. c. Sale of stock of a US corporation by a foreign shareholder. d. Deferred gain from an installment sale of business equipment during a year the business was engaged in a U.S. trade or business.
Helen Derby borrowed $150,000 to acquire a parcel of land to be held for investment purposes
Helen Derby borrowed $150,000 to acquire a parcel of land to be held for investment purposes. During the current year, she reported AGI of $90,000 and paid interest of $12,000 on the loan. Other items related to Helen's investments include the following: Investment and annuity income$11,000Long-term capital gain on sale of stock3,500Real estate tax on the investment land 800Helen is unmarried, does not itemize her deductions and does not elect to treat the capital gain as investment income. Helen did not have...
1. 2. 3. For tax planning purposes, Arnold would like to report all of the income...
1.
2.
3.
For tax planning purposes, Arnold would like to report all of the income from the sale of his computers in the current tax year, rather than use the installment sale method. However, Arnold heard that use of the installment method is required when at least one (1) payment is to be received after the close of the tax year in which the sale occurs. What code section and subsection would allow Arnold to elect out of the...
explain pls! _6. Gary sold business equipment in the current year for a $50,000 net gain...
explain pls!
_6. Gary sold business equipment in the current year for a $50,000 net gain (after taking into account any depreciation recapture). The equipment was originally purchased two years ago and was classified as a Section 1231 asset. This was the only asset sale for the year. Five years ago, Gary had a $60,000 net Section 1231 loss but he has not had any Section 1231 transactions since then. For the current year, Gary's net Section 1231 gain is...
22 Alain Mire files a single tax return and has adjusted gross income of $309,000. His net ilvestment income is $...
22 Alain Mire files a single tax return and has adjusted gross income of $309,000. His net ilvestment income is $48,000. What is the additional tax that Alain will pay on his net investment income for the year? None of the choices are correct 24 Michelle is an active participant in the rental condominium property she owns. During the year, the property generates a (522,500) loss however, Michelle has sufficient tax basis and at risk amounts to absorb the loss...
For a business with no interest income, what is the limitation on business interest deductions? What...
For a business with no interest income, what is the limitation
on business interest deductions?
What businesses are not subject to this limitation?
For a business that is subject to the limitation, what benefit
can the business get from interest payments that exceed the limit?
Give an example. For this question please refer to the screen shot
posted.
Limitation on Business Interest Deductions THE KEY FACTS BUSINESS INTEREST LIMITATION • The deduction of business interest expense is limited to business...
PM Distributors began Year 2 with Equity Investments of $8,400 (which consisted of a single investment)...
PM Distributors began Year 2 with Equity Investments of $8,400 (which consisted of a single investment) as well as a debit balance of $900 in the Fair Value Adjustment − Equity Investments account. PM does not have significant influence over the investee, and the investment has a readily determinable fair value. This trading security was sold for $9,300 during Year 2. How much was the gain or loss for the sale of this investments and how is it recorded? A....
1. PR.02-18 Income Concepts (LO. 4) 2. PR.02-23 Chelsea, who is single, purchases land for investment...
1. PR.02-18 Income Concepts (LO. 4) 2. PR.02-23 Chelsea, who is single, purchases land for investment purposes in 2014 at a cost of $22,000. In 2019, she sells the land for $38,000. Chelsea's taxable income without considering the land sale is $100,000. What is the effect of the sale of the land on her taxable income, and what is her tax liability? 3. PR.02-26 Refer to the tax rate schedule for calculations. 4. PR.02-28 Round all calculations to two decimal...
EFG, a calendar year, accrual basis corporation, reported $479,900 net income after tax on its financial...
EFG, a calendar year, accrual basis corporation, reported $479,900 net income after tax on its financial statements prepared in accordance with GAAP. The corporation’s financial records reveal the following information: EFG earned $10,700 on an investment in tax-exempt municipal bonds. EFG’s allowance for bad debts as of January 1 was $21,000. Write-offs for the year totaled $4,400, while the addition to the allowance was $3,700. The allowance as of December 31 was $20,300. On August 7, EFG paid a $6,000...
Daria sold 25 shares of Schulz Corporation stock she owned to her father on September 2nd...
Daria sold 25 shares of Schulz Corporation stock she owned to her father on September 2nd for $1,700. She purchased the stock in 2015 for $3,200. No stockbroker commissions were paid on either the sale or purchase of the stock. In addition to this sale, she reported a net short-term capital gain of $4,500. She also has a ($5,000) long-term capital loss carryforward available from last year. The amount of income/loss included in her adjusted gross income from these transactions...
1.
2.
3.
For tax planning purposes, Arnold would like to report all of the income from the sale of his computers in the current tax year, rather than use the installment sale method. However, Arnold heard that use of the installment method is required when at least one (1) payment is to be received after the close of the tax year in which the sale occurs. What code section and subsection would allow Arnold to elect out of the...
explain pls!
_6. Gary sold business equipment in the current year for a $50,000 net gain (after taking into account any depreciation recapture). The equipment was originally purchased two years ago and was classified as a Section 1231 asset. This was the only asset sale for the year. Five years ago, Gary had a $60,000 net Section 1231 loss but he has not had any Section 1231 transactions since then. For the current year, Gary's net Section 1231 gain is...
22 Alain Mire files a single tax return and has adjusted gross income of $309,000. His net ilvestment income is $48,000. What is the additional tax that Alain will pay on his net investment income for the year? None of the choices are correct 24 Michelle is an active participant in the rental condominium property she owns. During the year, the property generates a (522,500) loss however, Michelle has sufficient tax basis and at risk amounts to absorb the loss...
For a business with no interest income, what is the limitation
on business interest deductions?
What businesses are not subject to this limitation?
For a business that is subject to the limitation, what benefit
can the business get from interest payments that exceed the limit?
Give an example. For this question please refer to the screen shot
posted.
Limitation on Business Interest Deductions THE KEY FACTS BUSINESS INTEREST LIMITATION • The deduction of business interest expense is limited to business...
1. PR.02-18 Income Concepts (LO. 4) 2. PR.02-23 Chelsea, who is single, purchases land for investment purposes in 2014 at a cost of $22,000. In 2019, she sells the land for $38,000. Chelsea's taxable income without considering the land sale is $100,000. What is the effect of the sale of the land on her taxable income, and what is her tax liability? 3. PR.02-26 Refer to the tax rate schedule for calculations. 4. PR.02-28 Round all calculations to two decimal...
Most questions answered within 3 hours.
-
4. Without doing any calculations, predict whether the observed
∆T would increase, decrease or remain the...
asked 23 minutes ago -
Based on the range, which of the following sets of scores has
the greatest variability? 3,...
asked 1 hour ago -
Ripples in a pond travel at a velocity of 3 m/s with one peak
passing a...
asked 1 hour ago -
A man stands on the roof of a building of height 13.0 mm and
throws a...
asked 1 hour ago -
The extent to which assets are financed by borrowed funds and
other liabilities is indicated by:...
asked 2 hours ago -
Explain in detail
Germany is the fifth largest economy
explain what goods and services Germany specializes...
asked 2 hours ago -
The density of platinum is 21.45 g/mL. If a cube of platinum
with a mass of...
asked 2 hours ago -
Accounts Receivable
Sales
A/R Posting
Extended Sales Invoice
Packing Slip
Compare invoice to packing slip 2...
asked 2 hours ago -
Michaella, age 23, is a full-time law student and is claimed by
her parents as a...
asked 2 hours ago -
Why are polymers not typically casted into products?
asked 3 hours ago -
When rolling a die 129 times, what is the probability of rolling
a 6 no more...
asked 3 hours ago -
4. A call option currently sells for $7.75. It has a strike
price of $85 and...
asked 3 hours ago