Taxation in the United States: Case Study

From the information that was provided, the income was derived from the business and this gross income is taxable pursuant to Code§1.61-3(a). He is subject to self-employment tax, since the total amount of income that will come through to his personal tax income of half of the self-employment tax liability.

is generally applied to taxpayers. In particular, explain how the Code’s definition of income is different than other potential definitions of income, such as the economic concept of income, and use an example to illustrate the difference between the two systems. Explain how the Code approaches whether or not particular items should be included in income and how

The pool cost the petitioner over $19,000, and we cannot accept his contention that such amount was spent primarily for therapy for his leg in view of the limited need for such therapy and the alternatives which were then available.

Tiller Construction Corporation entered into two contracts with Nadler, the CEO of Glenmar, where Tiller would do “the work” for Nadler at Westridge for $637,000 and the other for Tiller to do “the work” for Nadler at Cranberry for $688,800. Nadler agreed to be personally liable to Tiller for the payment of both contracts. When the job was done, Nadler refused to pay the remaining balance of $229,799.46 for the Cranberry project and a remaining balance of $264,273.85 for the Westridge project. So Tiller sued Nadler for the amount owed, plus interest, costs, and attorney’s fees.

Parent Corporation owns 85% of the common stock and 100% of the preferred stock of Subsidiary Corporation. The common stock and preferred stock have adjusted bases of $500,000 and $200,000, respectively, to Parent. Subsidiary adopts a plan of liquidation on July 3 of the current year, when its assets have a $1 million FMV. Liabilities on that date amount to $850,000. On November 9, Subsidiary pays off its creditors and distributes $150,000 to Parent with respect to its preferred stock. No cash remain to be aid to Parent with respect to the remaining $50,000 of its liquidation preference for the preferred stock, or with respect to any common stock. In each of Subsidiary’s tax years, less than %10 of its gross

Indicate whether each of the items listed below would be included (A) in or excluded (B) from gross income for the 2012 tax year.

d. Is it more beneficial to continue leasing the business space or to buy the building?

John has income derived from a business and as such the gross income will be taxable (Code §1.61-3(a)) (Tax Almanac, 2005). This $300,000 taxable income will pass through to his personal taxes and is subject to self employment tax since he has an LLC. He

There are no tax benefits to John's income, but Jane's could use the $15,000 for purchase of equipment which could produce tax benefits that would become part of their joint return. If she left them in her business bank account, there would be no benefit to either of them.

The worst thing I think America ever did is putting way too many taxes on the poor. One of my reasons is that the poor can’t afford a lot of things with taxes and if the poor buy something they also have to pay taxes, which will make everything more Expensive. My Second reason is that the government should make a rule for taxes based on the person's income. My Third reason is that because of the taxes the poor are getting poorer and the rich are getting richer. Those are my three reasons for why taxes on the poor is the worst thing America did.

I hope you are doing well. Recently you contacted me seeking tax planning advice. As you have specified, you are planning to invest in a small business with about a $1 million annual revenue. Specifically, you are seeking advice on minimizing both your personal federal tax liability, and the federal tax liability of the business. I believe there are several different strategies that will result in minimization of your tax liability. I will explain these strategies more fully by focusing on both the small business and personal federal tax

In my opinion as to whether or not the current federal income tax structure is fair for most Americans is that it is not fair. The following information will provide support for my decision. The main federal tax brackets are for single individuals, married individuals filing separately, married individuals filing as a couple and individuals filing as a head of household. In the financial year 2014, the lowest tax bracket paid a rate of 10% on income up to $9,075 while the highest bracket paid an average rate of 36.4% ($406,751 and above). Most individuals pay taxes across several tax brackets, and as a result, they end up with the progressive tax structure. In the current progressive federal income structure, individuals with a lower

America has come a long way since gaining their independence from British rule which was the result of the colonial protests in the 1760s due to over taxation. These taxations directly led to the American Revolution in which this new independent nation collected taxes on land and property amongst many other things of value. Since that time there had been no taxes collected on religious organizations and their charities affiliated. This has been an ongoing controversial issue since the Establishment Clause in the First Amendment of the Constitution. The Establishment Clause could be open to interpretation and states that “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof” (U. S.

America might never have been an independent country if it weren’t for Great Britain's seemingly overbearing taxes. The colonies were adamant that taxing them was unfair as they were not being accurately represented. This grew into such a problem that it was one of the driving forces for independence. They fought for eight years to win it, and soon after established their own set of taxes. Tax rates have fluctuated since they were first implemented, but have always been based off the same progressive system. In a progressive tax system, those with more income contribute more, while those with less contribute less. This system has changed with us over the years, however, though there is no thought of starting a revolution to change it, its faultlessness

Tax system is a legal system of imposing and collecting taxes from the citizens of the country. As it has been stated by Albert Einstein, the hardest task in the world is to understand the tax system of a country. The United States’ tax system is so complicated that its tax code contains almost 3 million words and 6,000 pages. Moreover, the taxes implied by city and state governments add more complexity to the federal taxation system. In this case, we do not need to understand the complexity of tax code system in order to get acquainted with the significant role of taxes in American society.