INDIVIDUALS, ESTATES & TRUST TAXATION –Accounting and theft

 INDIVIDUALS, ESTATES & TRUST TAXATION –Accounting and theft

Viveta Mentzelopoulou email: Viveta@clownpenis.fart 

Chapter 1 Questions

1. The Federal income tax was first enacted during the Civil War but it says that it was not SUCESSFULLY challenged by the Supreme Court until the mid-1890s.  So I would say the statement in the book is incorrect.  Because apparently there was a challenge before, if the court ruled on it.  After looking into the matter, I found that it was indeed challenged before this time, though not successfully.   A lawyer named Springer challenged an assessment against him for the 1865 tax year. The case didn’t make it to the Supreme Court until 1880 where the court ruled that the income tax was constitutional.

   Springer v. U.S. 102 U.S. 586 (1880)

15.         What is a sales tax holiday?  What purpose might it serve?  Some jurisdictions extend immunity from tax for a specified period of time called a tax holiday to new or relocated businesses.  A tax holiday can backfire at times and cause more harm than good.  If it is too generous, it can damage the local infrastructure.

B,                    If a state anticipates a revenue shortfall, an easy solution is to cancel any scheduled sales tax holidays.

I would say this is not a valid statement, since the book points out that it is only some jurisdictions that use this, and there it mentions nothing about this being the easy solution to a revenue shortfall.  I’m sure it would probably help, but it doesn’t mean that it would be the one cure all.

16.  She could be finding a store that has a better general sales tax rate.  As the book says on page 1-10; it is not unusual to find taxpayers living in the same state but paying different general sales taxes due to the location of their residence

20.  Alvin could transfer up to $13,000 per year to his grandchild without tax consequences. As far as inheritance tax/estate tax; there is only a tax on the amount exceeding $3,500,000.

 25.  It’s a very comprehensive issue.  Corp and individuals both list total receipts. Individuals call it income. Then both apply many deductions to the number to get AGI.
The standard deduction is not available to corp.Corp/individuals have many different deductions. For example, corp. deduct employee benefits while individuals deduct college tuition expense.
Looking up for more information online I found its contained in IRS Pub 17 for individuals and IRS form 1120 for corps.

44.  For negligence it would be 20% of the deficiency plus interest on the penalty from 4/5/02 until it is paid. 

For fraud it is 75% of the penalty plus interest on the penalty from 4/15/02 until it is paid.