For each of the following tax treatments,explain the application of the income tax concept(s)that form the basis for the treatment.
a.Antonio uses his automobile 60% of the time in his insurance business and 40% of the time for personal purposes.Antonio is only allowed to deduct 60% of the cost of operating the automobile.
b.Teresa is a University student majoring in accounting.Teresa became a friend with her neighbor who owns an electronics store.In return for setting up an accounting system for her neighbor's store,Teresa is given an i-pod worth $600.Teresa must include the value of the i-pod in her gross income.
c.Larry bought 300 shares of Shamrock Common Stock in April for $6 per share.At December 31,Shamrock Common Stock is selling for $8 per share.Larry does not have to recognize any income from the Shamrock Common Stock in the current year.
d.Allan bought $10,000 Par Value of 8% Lake City Water Improvement District bonds for $9,200 several years ago.During the current year,Allan receives $400 in interest on the bonds before selling them for $9,600.Allan's only recognized income from the bonds is the $400 gain on the sale of the bonds.
e.Anita is an author of history books.In 2016,she signs a contract to write a book on the "History of the Tea Party." At that time,she received a $5,000 advance on her royalty payments.The terms of her contract require her to return the advance if she does not complete the book or if her royalties are insufficient to cover the advance.Anita finishes the book in 2016.Her total royalties from sales in 2017 are $12,000.Anita must include $5,000 in income in 2016 and $7,000 in income in 2017.

Question

For each of the following tax treatments,explain the application of the income tax concept(s)that form the basis for the treatment.
a.Antonio uses his automobile 60% of the time in his insurance business and 40% of the time for personal purposes.Antonio is only allowed to deduct 60% of the cost of operating the automobile.
b.Teresa is a University student majoring in accounting.Teresa became a friend with her neighbor who owns an electronics store.In return for setting up an accounting system for her neighbor's store,Teresa is given an i-pod worth $600.Teresa must include the value of the i-pod in her gross income.
c.Larry bought 300 shares of Shamrock Common Stock in April for $6 per share.At December 31,Shamrock Common Stock is selling for $8 per share.Larry does not have to recognize any income from the Shamrock Common Stock in the current year.
d.Allan bought $10,000 Par Value of 8% Lake City Water Improvement District bonds for $9,200 several years ago.During the current year,Allan receives $400 in interest on the bonds before selling them for $9,600.Allan's only recognized income from the bonds is the $400 gain on the sale of the bonds.
e.Anita is an author of history books.In 2016,she signs a contract to write a book on the "History of the Tea Party." At that time,she received a $5,000 advance on her royalty payments.The terms of her contract require her to return the advance if she does not complete the book or if her royalties are insufficient to cover the advance.Anita finishes the book in 2016.Her total royalties from sales in 2017 are $12,000.Anita must include $5,000 in income in 2016 and $7,000 in income in 2017.​

Quizplus · Accepted Answer

The Answer of For each of the following tax treatments,explain the application of the income tax concept(s)that form the basis for the treatment.
a.Antonio uses his automobile 60% of the time in his insurance business and 40% of the time for personal purposes.Antonio is only allowed to deduct 60% of the cost of operating the automobile.
b.Teresa is a University student majoring in accounting.Teresa became a friend with her neighbor who owns an electronics store.In return for setting up an accounting system for her neighbor's store,Teresa is given an i-pod worth $600.Teresa must include the value of the i-pod in her gross income.
c.Larry bought 300 shares of Shamrock Common Stock in April for $6 per share.At December 31,Shamrock Common Stock is selling for $8 per share.Larry does not have to recognize any income from the Shamrock Common Stock in the current year.
d.Allan bought $10,000 Par Value of 8% Lake City Water Improvement District bonds for $9,200 several years ago.During the current year,Allan receives $400 in interest on the bonds before selling them for $9,600.Allan's only recognized income from the bonds is the $400 gain on the sale of the bonds.
e.Anita is an author of history books.In 2016,she signs a contract to write a book on the "History of the Tea Party." At that time,she received a $5,000 advance on her royalty payments.The terms of her contract require her to return the advance if she does not complete the book or if her royalties are insufficient to cover the advance.Anita finishes the book in 2016.Her total royalties from sales in 2017 are $12,000.Anita must include $5,000 in income in 2016 and $7,000 in income in 2017.​

For Each of the Following Tax Treatments,explain the Application of the Income