Prentice Hall's Federal Taxation 2014 Corporations, 27e Chapter 12

Examples of gifts and payments include but are not limited to: meals, travel and travel accommodations, tickets to

7. A gift received for opening a bank account is not taxable income to the recipient.

30. In 2011, José, a widower, sells land (fair market value of $100,000) to his daughter, Linda, for $50,000. José has made a taxable gift of $37,000.

3. (p. 78) Individuals are allowed to give money or items of any value to a person without being subject to taxes.

(3) What amount of loss is allocable to the limited partner, Dr. Ashin, in this taxable year?

50 points) Sally is on the Board of Directors for Sally Susie's Donut Shop, Inc ("SSDS"). SSDS is a calendar year corporation on the accrual method of accounting. The taxable income for SSDS in year 1 was $250k, in year 2 donut sales plummeted and SSDS only made $10k. In year 3 SSDS had business pick up again and the taxable income was back to $150k. You think, "wow, donut sales is a volatile market!" SSDS made a charitable contribution on January 31 of year 2 of $50k to a 501(c)(3) charity. Sally comes to you as SSDS's tax advisor and asks how she should have deducted this amount optimally as she was very unhappy with her previous tax advisor. What do you advise, and what questions would you ask?

1. All distributions (excluding reasonable salary) to Paula and Mary will be taxed as dividends to them. And the corporation could not deduct this part of distribution.

When a life event, such as a death in the family, occurs and you are uncertain what the tax implications are, it is best to seek out the expertise of a CPA to help answer your tax questions. “My aunt passed away and left me some money . . . . Is it taxable?” Like most tax questions, that answer depends on the answers to several other questions. Usually the answer is NO. However, there are instances where you will pay income tax on money you receive as an inheritance, or taxed on the income that the assets you inherited generate.

In return, Helen receives 100 shares in Red Corporation. With respect to the transfers, (Points : 2)

A charitable trust described in Internal Revenue Code segment 4947(a)(1) is a trust that is not charge absolved, the greater part of the unexpired interests of which are committed to one or more altruistic purposes, and for which a magnanimous contribution reasoning was permitted under a particular section of the Internal Revenue Code. A magnanimous trust is dealt with as a private establishment unless it meets the prerequisites for one of the exclusions that groups it as an open philanthropy. Subsequently, it is liable to the private establishment extract charge provisions and alternate arrangements that apply to excluded private establishments, including end prerequisites and overseeing instrument requirements.  However, an altruistic trust is not regarded as a charitable association for motivations behind exception from tax.  Accordingly, the trust is liable to the extract charge on its speculation pay under the guidelines that apply to assessable establishments as opposed to those that apply to impose absolved establishments.

2010 Corporate Partnership Estate and Gift Tax with H&R Block TaxCut 4e Pratt Kulsrud Solution Manual

Current law for estate tax, gift tax, and generation skipping transfer tax is a 35% rate with an exclusion of $5.12 million. This is scheduled to change on January 1, 2013 to a 55% tax rate with an exclusion of $1 million. Due to the scheduled change, it would be advisable to be very aggressive in tax maximization before December 31, 2012.

Corporate Level Sale of Assets or Stock: Sales of assets or stock to a third party are generally taxable to the parent to the extent the purchase price exceeds the parent’s basis in the

The fourth clause governs the receipt of gifts, the exceptions thereof, and disclosure procedures. Interestingly, the exceptions list is longer than the gift rule itself. For example gifts from immediate family members or those with whom you have a close personal friendship are acceptable, which seems logical.

presence of the potential Supplier to determine the value of the gift in order to