Explain Why the Taxpayer in Each of the Following Situations

question 119

Essay

Explain why the taxpayer in each of the following situations either does or does not have taxable income and determine the amount, if any, that the taxpayer would have to recognize. Cory is an employee of Simmons, Inc. Several years ago Cory purchased a used bus from Simmons. The bus had an adjusted basis of $30,000. Cory agreed to pay $20,000 the fair
a. market value of the bus) for the bus if Simmons would finance the purchase over four years.
During the current year, when the debt on the bus was $5,000, Simmons told Cory that he didn't
have to make any more payments on the bus because of his perfect safety record over the last five years.
Several years ago Lauren's grandfather gave her $10,000 worth of City of Eau Claire,
b. Wisconsin bonds. After receiving $400 of interest in the current year, she sells the bonds for a gain of $800.
Portal Corporation employs Berry at an annual salary of $40,000. Portal provides a qualified
c. pension plan into which all employees are permitted to contribute up to 6% of their annual salaries. Portal matches contributions dollar-for-dollar. Berry contributes 6%.
Carla, a student at State College, receives a $3,000 scholarship for her grades in previous years.
d. She also earns $6,000 from a part time job. Her annual costs are $6,000 for tuition, books and supplies and $7,000 for room and board. Her parents pay the remaining $4,000 of her college
costs.

Recognize the impact of social, cognitive, and cultural factors on self-concept and self-esteem.

Identify stages and phenomena associated with self-awareness and empathy development.

Analyze the role of interpersonal relationships and societal influences in adolescence and adulthood development.

Examine the dynamics of identity development and crisis resolution during adolescence.

---

Definitions:

Metabolism

The sum of the chemical reactions that occur in a cell.

Autosomal Dominant

A pattern of inheritance where a trait can be expressed in an individual who has one copy of a gene associated with a trait.

Heterozygote

An organism having two different alleles of a specific gene, resulting in a mixed genotype.

Phenotypic

Relating to the observable characteristics or traits of an organism, which result from the interaction of its genotype with the environment.