Individual Income Taxes
43rd Edition
ISBN: 9780357109731
Author: Hoffman
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Question
Chapter 4, Problem 36P
To determine
Identify the effect of the given events on a cash basis taxpayer’s gross income for the year 2019 and 2020.
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Students have asked these similar questions
An individual taxpayer uses the cash method. Which of the following transactions results in gross income in 2020?
The taxpayer receives a dividend check on December 24, 2020 but does not cash the check until January 5, 2021.
The company mails a dividend check on December 30, 2020 but the taxpayer does not receive the check until January 3, 2021.
Wages earned in 2020 but not paid as of year-end
Stock awarded for services rendered but not vested for 2 years
Identify in which situation income was constructively received in 2022.
Situation
A taxpayer received a check on December 31, 2022.
Deposited the check to their bank account on
January 1, 2023.
A taxpayer sold their home on December 20, 2022.
Payment was received from the escrow company on
January 5, 2023.
A taxpayer's employer offers the taxpayer the option
to receive their year-end bonus on either December
15, 2022 or January 15, 2023. The taxpayer chooses
to defer it to January 15, 2023.
A taxpayer who performs consulting services was
informed by a client that a check for services they
had performed was ready to be picked up on
December 15, 2022. However, the taxpayer was on
vacation and unable to pick it up until January 3,
2023.
Was income constructively
received? (Yes/No)
Determine the effects of the following on a cash basis taxpayer's gross income for 2022 and 2023. If an amount is zero, enter "0".
Gross Income
2022
Income
2023
a. On the morning of December 31, 2022, the taxpayer received a $1,500
check from a customer. The taxpayer did not cash the check until January
3, 2023.
b. On the morning of December 31, 2022, the taxpayer received a $1,500
check from a customer. The customer asked the taxpayer not to cash the
check until January 3, 2023, after the customer's salary check could be
deposited.
On December 31, 2022, the taxpayer received a $1,500 check from a
customer. The check was not received until after the bank had closed on
December 31, 2022. The taxpayer did not cash the check until January 3,
2023.
Gross
II
10
Chapter 4 Solutions
Individual Income Taxes
Ch. 4 - According to the Supreme Court, would it be good...Ch. 4 - Prob. 2DQCh. 4 - Prob. 3DQCh. 4 - Ben lost his job when his employer moved its...Ch. 4 - Howard buys wrecked cars and stores them on his...Ch. 4 - On December 29, 2019, an employee received a 5,000...Ch. 4 - Prob. 7DQCh. 4 - A Series EE U.S. government savings bond accrues...Ch. 4 - The taxpayer performs services with payment due...Ch. 4 - Wade paid 7,000 for an automobile that needed...
Ch. 4 - Prob. 11DQCh. 4 - Prob. 12DQCh. 4 - A divorce agreement entered into in 2017 requires...Ch. 4 - Prob. 14DQCh. 4 - Patrick and Eva are planning to divorce in 2019....Ch. 4 - Prob. 16DQCh. 4 - Prob. 17DQCh. 4 - Prob. 18DQCh. 4 - Prob. 19DQCh. 4 - Prob. 20DQCh. 4 - On January 1, 2019, Kunto, a cash basis taxpayer,...Ch. 4 - Bigham Corporation, an accrual basis calendar year...Ch. 4 - LO.3 Simba and Zola are married but file separate...Ch. 4 - Casper and Cecile divorced in 2018. As part of the...Ch. 4 - LO.4 Elizabeth made the following interest-free...Ch. 4 - Prob. 26CECh. 4 - Prob. 27CECh. 4 - Prob. 28PCh. 4 - Prob. 29PCh. 4 - Determine the taxpayers gross income for tax...Ch. 4 - Prob. 31PCh. 4 - Prob. 32PCh. 4 - Prob. 33PCh. 4 - Your client is a partnership, ARP Associates,...Ch. 4 - Trip Garage, Inc. (459 Ellis Avenue, Harrisburg,...Ch. 4 - Prob. 36PCh. 4 - Marlene, a cash basis taxpayer, invests in Series...Ch. 4 - Drake Appliance Company, an accrual basis...Ch. 4 - Freda is a cash basis taxpayer. In 2019, she...Ch. 4 - Prob. 40PCh. 4 - Prob. 41PCh. 4 - Troy, a cash basis taxpayer, is employed by Eagle...Ch. 4 - Prob. 43PCh. 4 - Prob. 44PCh. 4 - Prob. 45PCh. 4 - Nell and Kirby are in the process of negotiating...Ch. 4 - Alicia and Rafel are in the process of negotiating...Ch. 4 - Prob. 48PCh. 4 - Prob. 49PCh. 4 - Prob. 50PCh. 4 - Prob. 51PCh. 4 - Prob. 52PCh. 4 - For each of the following, determine the amount...Ch. 4 - Prob. 54PCh. 4 - Prob. 55PCh. 4 - Linda and Don are married and file a joint return....Ch. 4 - Charles E. Bennett, age 64, will retire next year...Ch. 4 - Donna does not think she has an income tax problem...Ch. 4 - Prob. 1RPCh. 4 - Prob. 2RPCh. 4 - Prob. 3RPCh. 4 - Prob. 1CPACh. 4 - Fred and Wilma were divorced in year 1 (before...Ch. 4 - Bill and Jane Jones were divorced on January 1,...Ch. 4 - Jake pays the following amounts to his former...Ch. 4 - Mary purchased an annuity that pays her 500 per...
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- 1. In the third quarter of 2019, a taxpayer engaged in the sale of services whose annual gross receipts do not exceed P3M has the following data: Accounts receivable, beginning of quarter P 50,000; Sales during the quarter 100,000; Accounts receivable, end of quarter 75,000; Purchase of supplies, total invoice amount 11,200. The percentage tax due for the quarter is 2. In the third quarter of 2019, a taxpayer engaged in the sale of services whose annual gross receipts do not exceed P3M has the following data: Accounts receivable, beginning of quarter P 50,000; Sales during the quarter 100,000; Accounts receivable, end of quarter 75,000; Purchase of supplies, total invoice amount 11,200. Assuming the taxpayer is VAT-registered, the VAT payable is:arrow_forwardRequired information [The following information applies to the questions displayed below.] Clyde is a cash-method taxpayer who reports on a calendar-year basis. This year Paylate Corporation has decided to pay Clyde a year-end bonus of $1,000. Determine the amount Clyde should include in his gross income this year under the following circumstances. (Leave no answer blank. Enter zero if applicable.) a. Paylate Corporation wrote the check and put it in Clyde's office mail slot on December 30 of this year, but Clyde did not bother to stop by the office to pick it up until after year-end. Amount to be included in gross incomearrow_forwardf. Assume that on December 31, 2020, the treasurer of Hames decided to pay $15,000 of accounts payable. What impact, If any, this payment will have on the answers you calculated for parts e-d (Increase, decrease, or no effect). g. Assume that instead of paying $15,000 of accounts payable on December 31, 2020. Hames collected $15,000 of accounts recelvable. What Impact, If any, this receipt will have on the answers you calculated for parts a-d (Increase, decrease, or no effect).arrow_forward
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