Exercise 10-20 (LO. 6)
Donna donates stock in Chipper Corporation to the American Red Cross on September 10, 2016. She purchased the stock for $18,100 on December 28, 2015, and it had a fair market value of $27,000 when she made the donation.
a. The stock is treated as capital gain property and Donna’s charitable contribution deduction is $[removed] for tax purposes.
b. Assume instead that the stock had a fair market value of $15,000 (rather than $27,000) when it was donated to the American Red Cross. Donna’s charitable contribution deduction would be $[removed] for tax purchases.
Problem 10-26 (LO. 2)
Paul, age 62, suffers from emphysema and severe allergies and, upon the recommendation of his physician, has a dust elimination system installed in his personal residence. In connection with the system, Paul incurs and pays the following amounts during 2016:
In addition, Paul pays $750 for prescribed medicines.
The system has an estimated useful life of 20 years. The appraisal was to determine the value of Paul’s residence with and without the system. The appraisal states that his residence was worth $350,000 before the system was installed and $356,000 after the installation. Paul’s AGI for the year was $50,000.
a. What is the total of Paul’s qualifying medical expenses for 2016?
b. What is his medical expense deduction for 2016?
Problem 10-31 (LO. 3)
Alicia sold her personal residence to Rick on June 30 for $300,000. Before the sale, Alicia paid the real estate tax of $4,380 for the calendar year. For income tax purposes, the deduction is apportioned as follows: $2,160 to Alicia and $2,220 to Rick.
What is Rick’s basis in the residence?
Problem 10-34 (LO. 5)
Malcolm owns 60% and Buddy owns 40% of Magpie Corporation. On July 1, 2016, each lends the corporation $30,000 at an annual interest rate of 10%. Malcolm and Buddy are not related. Both shareholders are on the cash method of accounting, and Magpie Corporation is on the accrual method. All parties use the calendar year for tax purposes. On June 30, 2017, Magpie repays the loans of $60,000 together with the specified interest of $6,000.
a. How much of the interest can Magpie Corporation deduct in 2016? In 2017?
Magpie Corporation can deduct interest expense of $[removed] in 2016.
Magpie Corporation can deduct interest expense of $[removed] in 2017.
b. When is the interest included in Malcolm and Buddy’s gross income?
Problem 10-39 (LO. 6)
On December 27, 2016, Roberta purchased four tickets to a charity ball sponsored by the city of San Diego for the benefit of underprivileged children. Each ticket cost $200 and had a fair market value of $35. On the same day as the purchase, Roberta gave the tickets to the minister of her church for personal use by his family. At the time of the gift of the tickets, Roberta pledged $4,000 to the building fund of her church. The pledge was satisfied by a check dated December 31, 2016, but not mailed until January 3, 2017.
If an amount is zero, enter “0”.
a. Presuming Roberta is a cash basis and calendar year taxpayer, she can deduct $[removed] for the tickets and $[removed] for the pledge as a charitable contribution for 2016.
b. Would the amount of the deduction be any different if Roberta were an accrual basis taxpayer?
Problem 10-44 (LO. 2, 3, 4, 5, 6, 7, 8)
For calendar year 2016, Stuart and Pamela Gibson file a joint return reflecting AGI of $350,000. Their itemized deductions are as follows. Note: All expenses are before any applicable limitations, unless otherwise noted.
Round your intermediate computations to nearest whole dollar.
The Gibson’s total itemized deductions before any phaseout are $[removed].
The Gibson’s total itemized deduction is $[removed].
Why Work with Us
Top Quality and Well-Researched Papers
We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.
Professional and Experienced Academic Writers
We have a team of professional writers with experience in academic and business writing. Many are native speakers and able to perform any task for which you need help.
Free Unlimited Revisions
If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account or by contacting our support.
Prompt Delivery and 100% Money-Back-Guarantee
All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. In case you cannot provide us with more time, a 100% refund is guaranteed.
Original & Confidential
We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text. We also promise maximum confidentiality in all of our services.
24/7 Customer Support
Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.
Try it now!
How it works?
Follow these simple steps to get your paper done
Place your order
Fill in the order form and provide all details of your assignment.
Proceed with the payment
Choose the payment system that suits you most.
Receive the final file
Once your paper is ready, we will email it to you.
No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.
No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.
Admission Essays & Business Writing Help
An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.
Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.
If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied with the service offered.