hitting Individual Tax hard and wanted to ask you guys about a question previously asked about and a new one:
1) for the one @cupcake985 asked (refer to page 8) but here is a snippet of the fact pattern:
Gross receipts $400,000
Less COGS and deductions 320,000
Net business income $80,000
Capital gains 36,000
Gross income $116,000
In Oct. 2013, Thompson discovers that he had inadvertently omitted some income on his 2012 return and retains Mann, CPA, to determine his position under the statue of limitations. Mann should advise Thompson that the 6-year statue of limitations would apply to his 2012 return only if he omitted from gross income an amount in excess of
A $29,000
B $20,000
C $109,000
D $100,000
I searched for this on internet, came across Pearson education where they use the question. just out of curiosity I put in 109 as the answer, and they said that 29000 is the right answer (which is what i thought as well).
So which is it, Gross income is 116 or is gross income 409 (gross receipts + capital gain)????
2) In 2012, person paid following taxes:
Property taxes on residence – 1900
Special assessment for installing of a sewer system in town – 500
State personal property tax on automobile – 700
Property taxes on land held for long term appreciation 400
What amount can person deduct as taxes in calculating itemized deductions in 2012?
a. 3500
b. 2300
c. 2800
d. 3000
answer is 3000. i thought anything PERSONAL was not deductible, like auto loans unless it is ad valorem.
does anyone see in question where it would indicate that the personal property tax on auto is ad valorem?
i initially said 2300.
thanks all!
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