...such a situation, the most convenient - convenient form the point of view of the Revenue as well as the assessee - course would be to treat the price at which the goods are sold to the government as the normal price within the meaning of Section 4(1)(a). In fact, the learned Counsel says, that should be the only method. However, if for some reason, the Revenue is not prepared to adopt this course then, he says, the Revenue has to deduct all the aforesaid expenses and not merely the transportation charges as specifically provided by Sub-section (2) of Section 4. Sri Nariman relies upon the holding in Bombay Tyre International that deductions other than those specifically mentioned in Section 4 are permissible in law, depending no doubt upon the character of the deduction claimed. On the other hand, Sri Chandrasekheran, learned Additional Solicitor General, submits that Sub-section (2) of Section 4 does specifically envisage and provide for the situation concerned herein. It provides expressly that where the price of any excisable goods is not known at the place of removal and the value of such goods is determined with reference to the price charged at the time of their delivery from a place other than the place of removal, the transportation charges incurred for transporting the goods from the place of removal to the place of such delivery shall be excluded. submits that it is not the case of Revenue that the sales to the government are not normal or genuine transactions. It is also...
Words: 859 - Pages: 4
...Assignment 1 logic application In this paper I will summarize the salient facts of the "guess your card game" and explain my strategy in solving this problem. In doing so, I will respond to each player's comment and apply a strategy of process of elimination and logical deduction to establish new facts and reach conclusions. First when Andy responds "yes" to the question "do you see two or more players whose cards sum the same value," this is revealing. The sum of Belle's cards equal 16 (5+4+7=16). Carols cards sum up to be 12 (2+4+6=12). Since Andy cannot see his own cards he obviously cannot factor his own cards into his conclusion. As a result of this, I can deduce that I must be holding cards that equal either 16 or 12. Next, after Belle draws her question card, "of the five odd numbers, how many different odd numbers do you see?" and proclaims that she see's "all of them." The game contains the numbers 1 through 9. This means that the five odd numbers are 1,3,5,7 and 9. Andy has 1, 5 and 7, Belle has 5,4 and 7 but cannot see her own cards, and Carol has 2,4 and 6. Out of the odd numbers, only Andy has any visible to Belle. Since Andy has 1, 5 and 7, but Belle claims she can see all odd numbers, this must mean I have 3 and 9. 3+9=12 and since I still have one unidentified card to add to my total, and my total equals either 12 or 16 that unidentified card must be a 4. Lastly, Andy knows what numbers he has right away based on the answer to the second question...
Words: 337 - Pages: 2
...The issue in this case is to assess Phillip’s taxable income for the year ended 30 June 2010. According to section 4-15 Income Tax Assessment Act 1997 (ITAA 1997), taxable income equals assessable income (Division 6) minus deductions (Division 8). Assessable Income In order to determine the assessable income, Division 6 of ITAA 1997 would be the relevant legislation and in particular Section 6-1(1) refers assessable income consists of ordinary income and statutory income. - Rental Income Section 6-5(1) defines “assessable income” to include income according to ordinary concepts. In the case of Adelaide Fruit & Produce Exchange Ltd, ordinary income is characterized as exhibiting recurrence and regularity. For Phillip’s case, rent falls under income from property as it exploit the property and considered to be income producing. Whereas Adelaide’s ruling for periodic and regular payment is satisfied by which a tenant contracts to pay the landlord, Phillip, for the use of premises. Hence, rent income of $55 000 is assessable under Section 6-5 ITAA 1997. However, $5 000 rent received on 5 July 2010 is not included since the case is only calculating for year ended 30 June 2010. - Manufacturing of tennis racquets business Section 6-5 ITAA 1997 defines “business” as sustained and regular transactions and transactions done in the course of carrying on a business. This is satisfied by the manufacturing of tennis racquets where it regularly manufacture and...
Words: 1173 - Pages: 5
...Luis Alberto Zepeda Professor Juan C. Espinosa IDH2003 5 November 2014 Deductive Reasoning: Explaining Broad Points Deductive reasoning is a method of understanding that takes relatively uncertain claims to make an extremely certain claim. In other words, you can take to generally broad ideas and take the common factor between them to come up with a logical statement. Below, I will attempt to use deductive reasoning to support the following two statements: “We should tolerate all beliefs” and “All true claims rely on presuppositions.” The first claim seems relatively absurd when considering that many religious beliefs state something along the lines of “[insert belief here] is true absolutely, and it is the only absolute truth. It should be firmly believed by all, and a follower of this belief should try to enlighten others.” However, if we truly allow all beliefs to be incorporated into this analysis, there is no way to prove the claim as true, since Gödel's Incompleteness Theorem shows that the system is too broad and will collapse on itself. Said Nursi, a famous Islamic activist from Eastern Anatolia, tried to protect and argue his own religious and educational viewpoints by stating that if your belief is true and absolutely true, you have no need to resort to violence because you have the perfect argument to anything with your absolutely true belief. If we use this as a basis of defining true beliefs and make the edit “We should tolerate all [‘true beliefs’],” we can...
Words: 602 - Pages: 3
...main issues in this case is whether or not Rex and Agnes Harrell should be able to make deductions in excess of rental income on their beach house. This deduction depends on if the 14-day personal use provision was exceeded. If the 14-day provision was exceeded than income should be limited to rental income as the ISR decided in this case. However, we have determined that the Harrell’s have not violated the 14-day provision and should therefore be allowed deductions for rental expenses exceeding rental income. Facts: • The Harrell’s purchased a beach house to use occasionally for recreational purposes, but also to rent it out. • The house was in need of significant repairs so the couple decided to make the repairs themselves rather than hiring a contractor. Rex had taken advanced courses in woodwork at a local community college and he applied those skills in his maintenance work. • The log maintained by the Harrell’s showed that the couple occupied the house for 38 days and rented it out for 49 days. On 24 of the 38 days occupied, one or both of them were actively working on the beach house. • On the days they were working on the beach house they sometimes still had time for fun with their two teenage children. Some days they would only work 4 to 5 hours and be able to have fun while other days they would work 8 hours and not have time for fun. • The IRS has limited the deductions to rental income on the grounds that the 14-day personal use provision was exceeded. ...
Words: 1343 - Pages: 6
... | |3 |synthesis | |4 |analysis | 1. Alice Axia’s article discussed overlooked tax deductions. It talked about some of the most commonly missed deductions. Whereas her use of statistics seemed to bolster her arguments, it would have been nice to see her elaborate more about the specific deductions missed. She could have talked about what recourse, if any, a filer would have once he or she realized there was an overlooked deduction. She also should have focused more on why the deductions were overlooked, as that would have made the article more effective. 2. Alice Axia informs us of ways in which we can reduce our tax obligations in any given year. Based on studies she cited, there were cases in which some tax filers were unaware of various deductions they were eligible to claim. In some cases, those deductions would have saved the tax filers hundreds or even thousands of dollars. Some of the common missed deductions, according to Alice Axia, were the mortgage deduction, the energy efficiency deduction, and the charitable donation deduction. 3. In “Unclaimed Deductions,” Alice Axia wrote about the most commonly overlooked deductions when filing a 1040 tax return. She provided...
Words: 556 - Pages: 3
...to the rental of a portion of a dwelling unit to his employer. The employer is an S corporation of which the empfoyee is the sole shareholder and sole employee. During the period of the rental the individual used the rented portion in performing services as an employee. The individual atso used the dwelling unit as a principal residence. Our discussion supplements previous oral advice we have given you on this subject. Your inquiry was prompted by an individual described above who was concerned because he could not find a place on the applicable forms -to claim 'Certain business expenses and depreciation attributable to the rental income. You asked for guidaooe concerning the appropriate form(s) to use in reporting the rental income and deductions. Please note that technical assistance Words: 1846 - Pages: 8
...The profit motive distinguishes "business" activities from "personal" activities. True False 2. All business expense deductions are claimed above the line. True False 3. All investment expenses are itemized deductions. True False 4. Rental or royalty expenses are deductible "for" AGI. True False 5. To be deductible, business expenses must be directly related to a business activity. True False 6. The phrase "ordinary and necessary" means that an expense must be appropriate and helpful for generating a profit. True False 7. All reasonable moving expenses are deductible if the move is a minimum of 35 miles in distance. True False 8. To deduct a moving expense, the taxpayer must be employed or self employed for a specific amount of time after the move. True False 9. Self employed taxpayers can deduct the cost of health insurance as long as they do not actually participate in their spouses' employer-provided health plan. True False 10. Self employed taxpayers can choose between claiming a deduction or a credit for the employer portion of self employment taxes paid. True False 11. An individual who forfeits a penalty for prematurely withdrawing a certificate of deposit (CD) is allowed to net the penalty against the interest income from the CD. True False 12. Qualified education expenses for purposes of the deduction of interest on educational loans are expenses paid for the education of the taxpayer, the taxpayer's spouse, or a taxpayer's...
Words: 7125 - Pages: 29
...Retirement Planning Allen and Nancy Berger The ideal retirement benefit plan to install in Allen’s company would be the Defined Benefit Plan. The defined benefit plan best fits Allen’s current business situation in multiple ways. Allen will be able to maximize corporate tax deduction because employers are generally allowed to contribute more (and therefore tax deduct) than the alternative retirement plans. Business owners can write off these contributions as a business expense which is tax deductible, which will assist in Allen maximizing his corporate tax deduction. Defined benefit plans have no contribution limits, Allen and Nancy have a goal to secure a $61,241.90 after-tax serial payment by retirement. Other retirement plans such as the 401(k) have contribution limits that will not allow for Allen and Nancy to meet this future retirement goal. Defined benefit plans are truly ideal for small business owners who are behind in retirement savings and are nearing retirement. In the case of Allen who is currently 54 years old, the defined benefit plan is ideal because he is not restricted on how much he can contribute, so by the time he does reach the age of retirement, he will likely be able to reach his goal. Because of the maximums on plans such as 401(k) and Money Purchase plans, those alternatives would serve little use to someone like Allen looking to retire in less than a 20 year period. Allen currently has stable, predictable cash...
Words: 1456 - Pages: 6
...Case: Case Study 3, Trade or Business Deductions Facts: Dee Bater, a calendar year taxpayer, has a very successful law practice. On January 1, 2012 she purchased a country club membership which she uses partly for professional purposes. An analysis of her bills for 2011 shows her use of the club for the year to be as follows: Dinner with husband and family with purchase of drinks for any clients who happen to be present at the club, $240 Golf with present clients which was preceded or followed by a business discussion, $650 Golf with present clients during which some business was discussed, $200 Lunch with prospective clients during which some business was discussed, $470 Personal use of club facilities, $460 Lunch with prospective clients, on days when the Bater family used the club swimming pool, during which some business was discussed, $250 Lunch with present clients in order to discuss business $700 Luncheon with other attorneys to negotiate various matters pertaining to client affairs during which some business was discussed $400 Dinner with client attended by Dee Bater's husband and client's wife during which some business was discussed $200 Parties were given for current and prospective clients. The guest list included 50-100 people and Bater's employees were asked to attend and mingle $4,500 Yearly club dues were $3,000. Issue (1): Are...
Words: 1536 - Pages: 7
...employees. The members of this group are concerned with job security and future prospects. Therefore, they need information to assess the company’s profitability, liquidity and growth prospects. Employees need information about The financial state of the organization ( for their salaries) The growth and stability of the organization ( new investments ) to ensure continuity of employment. Profitability. Others are informational needs of external users including * Customers; Those who buy from the organization either for cash or on credit are interested in; The profitability The growth and stability ( new product lines) Customers will also need information or price so they can assess whether the company is overcharging them or not. * General public; This group includes the taxpayers, the consumer, social groups such as environmental societies and pressure groups such as the media organizations. Each individual group informational needs depend on its own particular interests. They require information...
Words: 381 - Pages: 2
...Investors can sign Legal Stability Contracts with the Colombian Government In order to promote new investments and expand existing ones, the government provides investors the option to sign a Legal Stability Contract, securing key conditions for investment promotion. Companies must meet the following requirements: • • • Minimum investment of USD 1,930,000 . Investors must pay a premium to the government equivalent to 1% of the investment. The period of the contract can last between 3 and 20 years. 1 . Income Tax deductible expenses Among the deductions included are the following: • 100% of the amount paid for industry and commerce, signs and billboards, and property taxes during the corresponding taxable year, as long as these are directly related to the taxpayer’s economic activity. 25% of the tax paid on financial transactions may be deducted, regardless of their relationship to the taxpayer’s economic activity. 125% income tax deduction over investments in scientific and technological...
Words: 1922 - Pages: 8
...people consider settlement payments as prices that one party pay to the others for their wrongful behaviors or violation of laws. For tax purposes, are settlement payments deductible? According to Internal Revenue Code (IRC) Section 162(a), any ordinary and necessary business or trading expenses are deductible during the current taxable year. That is to say if any settlement payments meet criterions of deduction under 162(a), but not in the exception of Section 162, should be deductible. In real court cases, IRS uses the exceptions of Section 162 to disallow settlement payments. Nowadays, more court cases and arguments appear to show that even though some settlement payments are in the exceptions of 162 (a), they can also be deducted. The relief of settle payments deductibility causes disagreements among tax professionals. Some believes settlement payments may be composed of deductible compensatory damages from non-deductible punitive damages; however, others worries that allowing deductibility may leads an indirect lesser penalty, because juries are unaware of tax benefits from deductions. This essay will mainly discuss the deductibility of settlement payments by explaining of original laws and regulation languages, citing tax professionals’ perspectives and illustrating actual court cases. According to IRC Section 162(a), “all the ordinary and necessary expenses” from “any trade...
Words: 2916 - Pages: 12
...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...
Words: 60111 - Pages: 241
...all serve to draw customers to supermarkets. Advertising among the top four supermarket chains (Kroger Co., Albertson’s Inc., Safeway Inc. and Publix Super Markets, Inc.) ran combined annual totals of $1.9 billion in the early part of the 21st century (http://www.msgcpa.com/files/Grocery.pdf). When donating food to a local food bank companies are able to save money on those costs. The food banks often times maintain public campaigns and benefit celebrations that advertise sponsors of not only money but also goods. With the food banks doing the advertising of the company’s generosity Company Q is able to project a positive community image and save on advertising costs. When it comes to allowable deductions for charitable donations the general rule is a company is allowed a deduction with respect to a contribution to a public charity. The property is described as A) The sum of one-half of the unrealized appreciation (market value – cost = appreciation) plus the tax payers cost. B) It cannot be in excess of twice the cost of the contributed property as described above. For example: •...
Words: 482 - Pages: 2
