Harrisburg LLC is a sole-proprietorship using the cash metho…
Harrisburg LLC is a sole-proprietorship using the cash method of accounting. On October 1, 2024, Harrisburg LLC prepaid $36,000 for an insurance contract. The contract is for 12-month general liability insurance coverage that started on October 1, 2024, and ends on September 30, 2025 (12 months later). The prepayment does not distort Harrisburg’s income, and the prepayment was made to take advantage of the insurance broker’s prepayment discount. Under these circumstances, what is the maximum deduction Harrisburg Corporation can recognize on its 2024 tax return?
Read DetailsHenry, a single taxpayer with a marginal tax rate of 35 perc…
Henry, a single taxpayer with a marginal tax rate of 35 percent (taxable income is $300,000 before considering any of the items below), sold the following assets during the year: Asset Sale Price Tax Basis Gain or Loss Holding Period ABC Stock $50,000 $25,000 $25,000 > One Year XYZ Stock $12,000 $9,000 $3,000 < One Year Stamp Collection $10,000 $5,000 $5,000 > One Year RST Stock $13,000 $24,000 ($11,000) < One Year What tax rate(s) will apply to Henry's capital gains or losses? Show your work to receive partial credit
Read DetailsIn 2024, Baker (single filer) earned $200,000 of self-employ…
In 2024, Baker (single filer) earned $200,000 of self-employment net income from his trade or business he operates as a sole proprietorship. Baker has no other sources of income. How much is Baker’s self-employment tax liability for 2024? Round to the nearest dollar.
Read DetailsOn January 1, 2024, Fred (cash basis taxpayer) purchased an…
On January 1, 2024, Fred (cash basis taxpayer) purchased an originally issued zero-coupon corporate bond for $45,000. The bond has a face value of $98,600 and a yield to maturity is 8%, compounded semiannually. The bond will mature in 10 years. Given that Fred will not actually receive any interest payments until the bond matures in 10 years, how much interest income will he report this year? Round to the nearest dollar.
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