...CHAPTER 7: DEDUCTIONS AND LOSSES: CERTAIN BUSINESS EXPENSES AND LOSSES 1. James is in the business of debt collection. He purchased a $20,000 account receivable from Green Corporation for $15,000. During the year, James collected $17,000 in final settlement of the account. James can take a $2,000 bad debt deduction in the current year. a. True b. False ANSWER: False RATIONALE: James has a basis of $15,000 in the account receivable and hence, he has income of $2,000. 2. If a business debt previously deducted as partially worthless becomes totally worthless this year, only the amount not previously deducted can be deducted this year. c. True d. False ANSWER: True 3. Last year, taxpayer had a $10,000 nonbusiness bad debt. Taxpayer also had an $8,000 short-term capital gain and taxable income of $35,000. If taxpayer collects the entire $10,000 during the current year, $8,000 needs to be included in gross income. e. True f. False ANSWER: False RATIONALE: The taxpayer must include the $10,000 in gross income to the extent of the tax benefit received last year. The entire $10,000 deduction provided a tax benefit; $8,000 offset by the short-term capital gain and $2,000 offset against ordinary income. 4. A cash basis taxpayer must include as income the proceeds from the sale of an account receivable to a collection agency. g. True h. False ANSWER: True 5. If an account...
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...CPA QUESTIONS CHAPTER 3 1. For “qualifying widow(er)” filing status, which of the following requirements must be met? I. The surviving spouse does not remarry before the end of the current year II. The surviving spouse was eligible to file a joint tax return in the year of the spouse’s death III. The surviving spouse maintains the cost of the principal residence for six months. A. I, II, and III B. I and II, but not III C. I and III, but not II D. I only A. Incorrect. A taxpayer may file a tax return as a qualifying widow or widower for 2 tax years after the year in which a spouse dies provided the couple qualified to file a joint return for the year of death; that the taxpayer provided over 50% of the cost of maintaining the principal residence of a dependent child or stepchild; and that the taxpayer has not remarried as of the end of the current year. Maintaining the cost of the taxpayer’s principal residence for six months is not sufficient. B. Correct! A taxpayer may file a tax return as a qualifying widow or widower for 2 tax years after the year in which a spouse dies provided the couple qualified to file a joint return for the year of death; that the taxpayer provided over 50% of the cost of maintaining the principal residence of a dependent child or stepchild; and that the taxpayer has not remarried as of the end of the current year. Maintaining the cost of the taxpayer’s principal residence for six months...
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...Brazilian Accounting System: Inflation, Taxation, and the Adoption of International Financial Reporting Standards Introduction As the business world evolves to a higher level of integration with the increased ability to conduct business globally, international accounting is a subject that is becoming more relevant and increasingly more important to understand. Doupnik and Perera (2012) define International accounting on three levels through the standards and guidelines of supranational organizations, at the company level, and third through the standards, rules, and guidelines that exist within each country. Brazil is one of the top five countries to be considered an emerging market (Top 30 Emerging Markets 2012-2017). It is estimated that Brazil’s GDP will grow by roughly 22.3% between the years 2013 to 2017 making the country attractive to investors (The Top 20 Emerging Markets, 2013) . Brazil ranks as one of the top 4 countries for growth in the manufacturing and industrial industries, telecommunications, technology and media, professional and business services, financial services, consumer products, pharmaceuticals and healthcare, energy and resources, automotive, chemicals, and transportation industries (Top 30 Emerging Markets 2012-2017). In addition Brazil will be a destination for world class events such as the 2014 World Cup and 2016 Olympic Games that will bring thousands of visitors to the country. As Brazil continues to grow in popularity as a location for trade...
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...Complexities of leasing, taxation, error correction and changes in accounting Phase 3 Group Project/Group A Paula Campbell Colorado Technical University Online Professor Monica Phillis ACC346-0902A-01: Intermediate Accounting II April 28, 2009 Recommendation The accounting team has thoroughly researched the defined contribution plan, defined benefit plan and simple plan that are under consideration to install at BC Corporation. The defined benefit plan is the most costly and complex plan. It also carries an excise tax if the minimum contribution requirement is not met. The simple plan is just what it implies simple with limited options. The defined contribution plan has many advantages for the employer as well as the employee. It is less costly than the defined benefit plan and is easier to administer. This plan is also tax advantaged due to the contributions and earnings being tax deferred money. The advantages for the employee are it’s portable, has strong growth potential and the contributions are pre-tax. (Sepe, J., Spiceland, D., & Tomassini, L., 2007) With these advantages we can predict greater participation in the plan. Our recommendation is the defined contribution plan. It is the most advantageous for the business and can grow as we grow. The accounting for the defined contribution plan will reflect on the income statement and balance sheet. For the income statement the amount of the contribution is recorded as an operating expense usually under...
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...Courses in Accounting/Tax Research and Analysis and Accounting/Business Communications September 3, 2014 The Texas State Board of Public Accountancy requires each candidate to complete a minimum of two semester hours in accounting research and analysis or tax research and analysis from a recognized college or university. The semester hours may be obtained through a discrete course or offered through an integrated approach. If the course content is offered through integration, the college or university must advise the Board which course(s) contain the research and analysis content. Courses identified through integration must dedicate 1 semester hour, or quarter hour equivalent, to research and analysis. Courses used to meet this requirement may not be used to meet the requirement for accounting or business communications described below. Course(s) identified by a university to meet the requirements for research and analysis in accounting or taxation should primarily address the identification, organization, and integration of diverse sources of information such as authoritative literature and pronouncements, to reach a conclusion or make a decision; and should analyze accounting and taxation issues by reviewing information, using empirical data and analytical methods, recognizing data in patterned activities, forecasting, and integrating data. CPAs may be asked to conduct research and analysis when providing attest services, professional accounting services, or...
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...International Journal of Accounting and Financial Reporting ISSN 2162-3082 2014, Vol. 4, No. 2 Causes of Tax Evasion in Pakistan: A case study on southern Punjab Waseem Ahmad Khan (Corresponding author) Lecturer, Department of Management Sciences, The Islamia University of Bahawalpur, Pakistan E-mail: waseemkhan_hcbf@yahoo.com, Tel: +92-333-3133540 Prince Fawad Ahmad Student, Department of Management Sciences, The Islamia University of Bahawalpur, Pakistan Accepted: October 15, 2014 DOI:10.5296/ ijafr.v4i2.6484 URL: http://dx.doi.org/10.5296/ ijafr.v4i2.6484 Abstract Introduction: Tax evasion is main problem in Pakistan due to which Pakistan remains under a lot of stress. Tax evasion results in less revenue. Many causes have been discussed which play major role in tax evasion in Pakistan. It is a primary research. Literature review: Many authors have discussed impacts of tax evasion in different sectors of economy. Previously tax evasion cause major trouble in Tanzania & Greece. Methodology: A questioner has been filled by targeted population of 100 Professionals & Business students of Department of Management Sciences Islamia University of Bahawalpur. Questioner was consisted of 5 major parts i.e. Tax System, High rate, Go with the flow, Corrupt Govt. & Progressive taxation. Findings: Most of the population agrees that these causes play a vital role in the tax evasion in the Pakistan. Conclusion: Tax evasion is main problem of Pakistan which...
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...this technical article and answering the related questions can count towards your verifiable CPD if you are following the unit route to CPD and the content is relevant to your learning and development needs. One hour of learning equates to one hour of CPD. We'd suggest that you use this as a guide when allocating yourself CPD units. IAS 12 uses a liability method and adopts a balance sheet approach to accounting for taxation. It accounts for the temporary differences between the accounting and tax bases of assets and liabilities rather than accounting for the timing differences between the accounting and tax consequences of revenue and expenses. IAS 12 adopts a full provision balance sheet approach to accounting for tax. It is assumed that the recovery of all assets and the settlement of all liabilities have tax consequences and that these consequences can be estimated reliably and cannot be avoided. As the IFRS recognition criteria are different from those which are normally set out in tax law, certain income and expenditure in financial statements will not be allowed for taxation purposes, thus causing 'temporary differences'. A deferred tax liability or asset is recognised for the future tax consequences of past transactions with certain exemptions. The standard assumes that each asset and liability has a value for tax purposes and this is called a tax base. Differences between the carrying amount of an asset and liability and its tax base are called temporary differences. The...
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...publication should not be regarded as offering a complete explanation of the taxation matters referred to. The publishers and the authors are not responsible for the results either of any actions taken on the basis of information in this publication, nor for any error in or omission from this publication. The publishers and the authors expressly disclaim all and any liability and responsibility to any person, who acts or fails to act as a consequence of reliance upon the whole or any part of the contents of this publication. Contents Chapter 1 – Introduction • Geography • Climate • • • • • • • • • • • 6 6 6 6 7 7 8 8 9 9 10 10 11 ¡ ¢ Language and Currency Legal System Advantages of Investing in Korea Constitution Economy Import Controls Major Exports and Imports Communications Finance Government Policy on Foreign Investment in Korea Exchange Controls Chapter 2–Business Forms Available to Foreign Investment • • • • • • 13 £ ¢ £ ¢ Local Corporation Establishment Private Business Registration Establishment of a Foreign Company's Domestic Branch Directors Registration requirements and filing procedures for public securities Shareholdings by non-residents Chapter 3 – Accounting • • • Business Accounting Standards Audit Policies External Audit Policy © 18 . 18 19 19 19 Introduction of the International Financial Reporting Standards § ¨ ¤ ¥ ¦ ¥ ¦ ¥ Chapter 4 – Taxation • • • • 21 21 Introduction Fiscal Year Lodgement of returns National...
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...REGENT UNIVERSITY OF SCIENCE AND TECHNOLOGY ASSESSING THE IMPACT OF THE VALUE ADDED TAX (VAT) SCHEME ON THE REVENUE GENERATION CAPACITY IN GHANA A LONG ESSAY PRESENTED TO THE SCHOOL OF ARTS AND SOCIAL SCIENCES (SASS), REGENT UNIVERSITY COLLEGE OF SCIENCE AND TECHNOLOGY, IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE AWARD OF BACHELOR OF SCIENCE DEGREE IN ACCOUNTING AND INFORMATION SYSTEMS NII TORTO QUAO (022 0207) DECEMBER 2009 DECLARATION I hereby declare that this long essay is the original research undertaken by me, including all references from other books, handouts, internet, magazines, textbooks, etc under the supervision of the under signed lecturer. Mr. Albert Akanferi …………………………….. ……………………………….. (Supervisor) Signature Date Nii Torto Quao …………………………….. ………………………………. (Student) Signature Date i ABSTRACT A strong and efficient tax system provides the basis for enhanced economic growth and development. Ghana’s fiscal structure prior to 1983 had generally been characterised by low tax revenue. As a result Ghana undertook a number of reforms prescribed by the International Monetary Fund and the World Bank under the Economic Recovery Programme (ERP) and the Structural Adjustment Programme (SAP). Tax reforms constituted one of the essential ingredients of SAP. The tax reform process has assumed diverse dimensions over the pass two and half decades. One of those tax reforms was the Value Added Tax scheme (VATs). The purpose of this study is to assess...
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...write good sentence structures * Word count – 1,000 words – don’t write irrelevant points or too many definitions * Please indicate your word count at the end of your report. * Referencing (Part of presentation) * APA or Harvard is fine – proper citation (Author, year) * Make sure you includes some journal articles * Make sure the articles that you include in the reference list are cited in main text * Make sure what are cited in main text are included in the reference list Answer the questions by parts in the proper sequence and organized manner: a) How exploration and development costs create a DT liability? Hints: * Explain DT liability * How DT liability is created? * Explain the accounting treatment vs. tax treatment * relate it to future taxable/deductible amount * taxable/deductible temporary differences * tips: prepayment b) Read and apply throughout the discussion * AASB 12 Income Taxes * Current tax * Deferred tax c) Analyze actions and...
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...CHAPTERS SEVEN & EIGHT - CAPITAL GAINS: AN INTRODUCTION (Div B, Subdiv c , S38-55) HISTORY Prior to 1972 capital gains were not taxed in Canada and capital losses could not be claimed. The portion (inclusion rate) of a capital gain or loss which is taxable/deductible has changed since then. [calendar 1972 to 1987 => 50%; calendar 1988 to 1989 => 66.67%; calendar 1990 to Feb 27, 2000 => 75%; Feb 28 to Oct 17, 2000 => 66.67%; Oct 18, 2000 to present => 50%] Since 1972, each disposition of capital property requires a separate calculation of taxable capital gain or allowable capital loss. Section 3(b) requires that allowable capital losses be offset against taxable capital gains, except as discussed below for PUP (including LPP) and ABILs. If the net result of all current year capital dispositions is a taxable capital gain, this amount is included in Division B income. If the net result is an allowable capital loss, this amount is not deductible currently since allowable capital losses can ONLY BE DEDUCTED AGAINST taxable capital gains. (A net allowable capital loss for the current year can be carried over to other years under Division C, as will be discussed in chapter 10.) ABILs Allowable Business Investment Losses are effectively allowable capital losses, resulting from the disposition of shares or debt of Small Business Corporations (CCPCs carrying on Active Business), which are deductible against any type of income. (ie not restricted to capital gains.) As such they...
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...| Improvement of Corporate Tax Audit: Factor of Increasing Tax Compliance in Malaysia | | Table of Contents Executive Summary 3 Introduction………………………………………………………………………………………..4 Tax Compliance, Tax Evasion and Tax Audit…………………………………………………….4 Tax Audit in Malaysia…………………………………………………………………………….6 Organization Structure…………………………………………………………………………….8 Tax Audit Process…………………………………………………………………………………9 Tax Audit: Constraints and Problems……………………………………………………………11 Recommendations………………………………………………………………………………..16 Conclusion……………………………………………………………………………………….18 References……………………………………………………………………………………….19 Appendix………………………………………………………………………………………...20 Executive Summary The Malaysian tax system follows the concept of self-assessment system (SAS). Under the SAS, the government trusts and gives taxpayers full responsibility to calculate, to pay and to report their tax due on their own. The success of SAS not only depends on the good tax administration but also depends on the taxpayer awareness, which is indicated by the taxpayer compliance in fulfilling his obligation. In order to enhance the level of tax compliance, the Inland Revenue Board of Malaysia (IRBM) considers that it can be achieved by law enforcement besides tax consultation and tax service. Law enforcement comprises of tax audit, tax investigation and tax collection. Tax audit becomes important since it can cause a deterrent effect to increase taxpayer compliance. Tax audit plays an important role in determining the...
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...LAWS7012 | Business Taxation Assignment – Semester 1 | 2014 Important Facts to Note 1. The assignment is worth 40% of the assessment in this course. 2. The assignment has 2 questions. 3. You must submit your assignment before 4.00pm on Thursday, 17 April 2014. 4. Students must submit their assignment electronically via the Turnitin link [LAWS7012 | 2014 – Semester 1] in the Assignment Submission folder in the Assessment area of the course website in Blackboard. Online assignments do not require a separate cover sheet. Refer to documentation in the Assignment Submission folder on the naming requirements of the assignment file. 5. There is no prescribed word limit for this assignment and no penalties will be applied for students who exceed the suggested word limit. As a guide, your assignment could be completed in approximately 3,500 words. 6. Students must retain a hard copy of their submitted work. 7. Students need to be aware of and abide by the university’s policy on plagiarism. More detailed information on this issue can be found in: a. UQ Student Integrity and Misconduct Policy http://ppl.app.uq.edu.au/content/3.60.04-student-integrity-and-misconduct b. On-line Academic Integrity Tutorial https://www.uq.edu.au/integrity/Login.aspx?ReturnUrl=%25252fintegrity c. Law School Resource | Avoiding plagiarism http://www.law.uq.edu.au/?page=103927 8. Also, review Sections 5.3, 5.5 & 6.1 of the Course Profile for information on assessment procedures. In particular...
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...Contents Introduction2 Detail 3 Task 1 3 Task 213 Task 319 Task 420 Conclusion27 Reference27 INTRODUCTION We are in business as tax practitioner and have recently gained three new clients. They are Simon - a manager working for Able plc, Oliver Green - a self-employed running a health food shop and a corporation operating in UK. We are assigned to help them calculate their relevant income, expense and allowance, income tax payable for the tax year 2006/07, capital gain tax payable, the profit chargeable to corporation tax, corporation tax liability and give them some advices to reduce the personal tax liability. TASK 1 Simon was born in May 14, 1954 and is a manager working for Able plc, a large UK resident company. Accordingly, in the period 2006 – 2007, he was 53 years old. As a result, his personal allowance (PA) for 2006/07 is £5,035. In the period 2006 – 2007, Simon received a gross salary of £45,000 and in February 16, 2007 he received a bonus of £5,000 based on Able plc’s results for the year ended December 31, 2006. His earning is higher than £8,500. Therefore, in this case, special rules for P11d employees will be applied. The main benefits for the special rules exist are: (a) Assets loaned to the employee for private use (b) Ancillary services connected with living accommodation (c) Cars provided for private use (d) Fuel provided for private use (e) Vans provided for private use (f) Beneficial loans Furthermore, Simon received the following benefits...
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...1. Introduction Accounting treatment for income taxes for for-profit entities is subject to Australian Accounting Standard Board (AASB) 112 Income Taxes. In accounting for income tax, complying with tax-effect method involves the occurrence of tax consequences due to different treatments are applied for transactions and other events happened inside an entity for accounting and taxation purposes, namely current tax consequences and future tax consequences. The purpose of this report was to identify and analyze the reasoning behind the responsibility of exploration and development costs (E&D) for the creation of a deferred tax liability (DTL) and its treatments for both accounting and taxation purposes. Moreover, the analysis was performed with reference to case study of Gravatt Ltd., a company operating in the mining industry where its directors arguing on the disadvantages of applying tax-effect accounting standards of AASB 112 and rather not to comply with one. This report was not discussing only on the rationale behind deferred tax liabilities according to AASB Framework for the Preparation and Presentation of Financial Statements and AASB 112 Income Taxes, but also the comparison of the impact on information utility captured by the users of financial statements of Gravatt in case of recognizing and unrecognizing deferred tax liabilities to be reported on its annual reports. 2. Discussion 2.1 Deferred Tax Liabilities Deferred tax liabilities (DTL) can be defined...
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