Homework Assignments: Chapter 1224. North Inc. is a calendar-year, accrual-basis taxpayer. On the finish of the yr 1, North accruedand deducted the next bonuses for sure workers for monetary accounting functions.$7,500 for Lisa Tanaka, a 30 p.c shareholder.$10,000 for Jared Zabaski, a 35 p.c shareholder.$12,500 for Helen Talanian, a 20 p.c shareholder.$5,000 for Steve Nielson, a zero p.c shareholder.Until said in any other case, assume these shareholders are unrelated.How a lot of the accrued bonuses can North Inc. deduct in yr 1 underneath the followingalternative eventualities?a. North paid the bonuses to the staff on March 1 of yr 2.b. North paid the bonuses to the staff on April 1 of yr 2.c. North paid the bonuses to workers on March 1 of yr 2 and Lisa and Jared arerelated to one another, so they’re handled as proudly owning every other’s inventory in North.d. North paid the bonuses to workers on March 1 of yr 2 and Lisa and Helen arerelated to one another, so they’re handled as proudly owning every other’s inventory in North.27. Marcus is the CEO of publicly traded ABC Company and earns a wage of $1,500,000.Assume ABC has a 35 p.c marginal tax price.a. What is ABC’s after-tax price of paying Marcus’s wage?b. Now assume that Marcus, along with the $1.5 million wage, earns a performancebased bonus of $500,000. What is ABC’s after-tax price of paying Marcus’s wage?129. Cammie obtained 100 NQOs (every possibility supplies a proper to buy 10 shares of MNLstock for $10 per share) on the time she began working for MNL Company 4 years agowhen MNL’s inventory value was $eight per share. Now that MNL’s inventory value is $40 per share, sheintends to train all of her choices. After buying the 1,000 MNL shares together with her choices,she held the shares for over one yr and offered them at $60 per share.a. What are Cammie’s tax penalties on the grant date, the train date, and the dateshe offered the shares assuming her extraordinary marginal price is 30 p.c and her capitalgains price is 15p.c?b. What are MNL Corporation’s tax penalties on grant date, train date, and dateof sale assuming its marginal tax price is 35 p.c?c. Full Cammie’s Schedule D for the yr of sale.32. Mark obtained 10 ISOs on the time he began working for Hendricks Company 5 yearsago when Hendricks’s value was $5 per share (every possibility provides him the appropriate to buy 10shares of Hendricks Company inventory for $5 per share). Now that Hendricks’s share value is$35 per share, he intends to train all choices and maintain all of his shares for greater than yr.Assume that greater than a yr after train, Mark sells the inventory for $35 a share.a. What are Mark’s tax penalties on the grant date, the train date, and the date hesells the shares assuming his extraordinary marginal price is 30 p.c and his long-termcapital beneficial properties price is 15 p.c?b. What are Hendricks’s tax penalties on these dates assuming its marginal tax price is25 p.c?237. On January 1, yr 1, Jessica obtained 10,000 shares of restricted inventory from her employer,Rocket Company. On that date, the inventory value was $10 per share. On receiving therestricted inventory, Jessica made the §83(b) election. Jessica’s restricted shares will all vest at theend of yr four. After the shares vest, she intends to promote them instantly to fund an aroundthe-world cruise. Sadly, Jessica determined that she couldn’t wait 4 years and give up herjob to begin her cruise on January 1, yr three.a. What are the yr 1 tax penalties of those transactions to Jessica, assuming hermarginal tax price is 33 p.c and her long-term capital beneficial properties price is 15 p.c?b. What are the yr three tax penalties of those transactions to Jessica, assuming hermarginal tax price is 33 p.c and her long-term capital beneficial properties price is 15 p.c?42. Lars Osberg, a single taxpayer with a 35 p.c marginal tax price, needs medical insurance.The medical insurance would price Lars $eight,500 to buy if he pays for it himself (Lars’s AGIis too excessive to obtain any tax deduction for the insurance coverage as a medical expense). Volvo,Lars’s employer, has a 40 p.c marginal tax price. Reply the next questions aboutthis profit (ignore FICA taxes in your Assessment).a. What is the utmost quantity of before-tax wage Lars would give as much as obtain healthinsurance from Volvo?b. What can be the after-tax price to Volvo to offer Lars with medical insurance if it couldpurchase the insurance coverage by means of its group plan for $5,000?c. Assume that Volvo might buy the insurance coverage for $5,000. Lars is concerned about gettinghealth insurance coverage and he is prepared to obtain a decrease wage in change for the healthinsurance. What is the least quantity by which Volvo can be prepared to cut back Lars’ssalary whereas agreeing to pay his life insurance coverage?d. Will Volvo and Lars have the ability to attain an settlement by which Volvo will present Lars’shealth insurance coverage?348. Sharmilla works for Shasta Lumber, a native lumber provider. The corporate annuallyprovides every worker with a Shasta Lumber shirt in order that workers look branded andadvertise for the enterprise whereas carrying the shirts. Are Shasta’s workers required toinclude the worth of the shirts in earnings?four

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