(5 points) Marla is one of three partners in a partnership for a silk-screen t-shirt shop called Smar-Tees and all partners are active in the management of the company. The company uses a calendar year tax period. During Year 1, the partnership had an ordinary loss where the amount of loss allocated to Marla based on her profits interest percentage is $45,000. Assume that Marla’s adjusted (ending) outside basis incorporating everything relevant for her basis from Year 1 except this loss allocated to her is $38,000. Using only the information available in the above scenario and ignoring any role of the QBI deduction (if applicable) for this calculation, what will Marla’s adjusted (ending) outside basis be after incorporating the loss and how much of the partnership loss will she get to use on her individual tax return for Year 1?

(1 point). For the following scenario, determine whether the related book-tax difference (if any) is temporary or permanent. Hilton Corporations is considering adding a new hotel location in Santa Fe, NM. It sends two employees to survey the area during the year. The company pays $1,000 for flights, no cost for lodging (uses one of its alternative local hotel locations to house them), and $300 for meals. The employees spent the entire trip doing work for the project (no personal use time).

(1 point). For the following scenario, determine the dollar amount of book-tax difference (if any) written as a positive number. Patriot Construction Co. received $11,500 in interest income on a municipal bond it holds for the city of Falls Church during the year.

(2 points) Which of the following generally produces a taxable temporary difference in the year the activity occurs?

(4 points) On January 1, Ryan and James decided to open a Peruvian chicken restaurant (yum!). Ryan contributed the building and land for the restaurant that had a fair market value of $178,000 and adjusted tax basis of $128,000 for a 50 percent profits interest and capital interest. Ryan had a $35,000 business loan. James contributed $47,000 of cash for a 50 percent profits interest and capital interest. The new partnership relieves Ryan by taking on the loan. Should the partnership fail to pay the loan, the creditor is only able to claim potential future profits of the company but cannot go after the personal assets of either partner. The company uses a calendar year tax period. In the above scenario, what is the partnership’s inside basis on the restaurant and cash contributed?

(4 points) Regal Corporation assessed that $280,500 of its research tax credit on its current year tax return was uncertain, but that it was more likely than not to be sustained on audit. Management at Regal determined the following assessment of the company’s potential tax benefit from the credit and its probability of occurring. Potential Estimated Benefit Individual Probability of Occurring (%) Cumulative Probability of Occurring (%) $280,500 21% 21% 265,000 13 34 175,000 19 53 121,000  25 78 0 22 100   Based on the above scenario, what is the portion of the $325,000 credit that will be unrecognized (require a liability) for uncertain tax positions?

(4 points) Green Bank Corporation claimed $250,000 in Sec. 179 expense and $250,000 in bonus depreciation in 2024 and the following is the remaining basis for each asset purchased in 2024 after applying Sec. 179 and bonus depreciation: Desks and chairs purchased on March 15, remaining basis: $175,000. Computers purchased on April 3, remaining basis: $165,000. What is the total depreciation expense for the taxpayer in 2024?

(4 points) Total depreciation – A hotel purchased a new office desk on April 15, 2022 and new executive style chairs for the office on August 5, 2022. The office desk cost $1,200 and the chairs cost $2,400. Determine the total depreciation amount for 2024 assuming the taxpayer opted out of Sec. 179 and bonus (if available) in the year of purchase. In addition, assume all taxpayers use a calendar year tax period and that the property mentioned was the only property purchased in the year of acquisition. Use the appropriate depreciation table from your note sheet/textbook where necessary.

(4 points) Total depreciation – An accounting firm bought an office building on October 15, 2019, which cost $710,000. Determine the total depreciation amount for 2024 assuming the taxpayer opted out of Sec. 179 and bonus (if available) in the year of purchase. In addition, assume all taxpayers use a calendar year tax period and that the property mentioned was the only property purchased in the year of acquisition. Use the appropriate depreciation table from your note sheet/textbook where necessary.

Use the following tax structure to answer Part 1 and Part 2. Taxpayer Taxable Income Total Tax Chandler $80,000 $25,000 Monica $60,000 $25,000 Phoebe $35,000 $25,000 Joey $35,000 ? Rachel $60,000 $25,000 Ross $80,000 $25,000   For this system to be fair in terms of horizontal equity, how much tax should the tax system require Joey to pay? (4 points)