You Are the CPA Who Prepares the Tax Returns for Dudley

question 88

Essay

You are the CPA who prepares the tax returns for Dudley, his wife Margo, and their two corporations. Dave owns 100% of Duright Corporation's stock. Duright's current-year taxable income is $100,000. Margo owns 100% of Northwest Corporation's stock. Northwest's current-year taxable income is $150,000. Dudley and Margo file a joint federal income tax return. What issues should be considered with respect to the calculation of the three tax return liabilities?

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Definitions:

Fixtures

refer to objects that were originally personal property but became attached to and part of real property in a way that they cannot be removed without damage.

Lease Term

The duration for which a lease agreement is effective, specifying the start and end date, as well as conditions for renewal or termination.

Trade Fixtures

Personal property that a tenant attaches to leased land or buildings for business purposes, which may be removed at the end of the lease.

Dentist Chairs

Equipment specifically designed for use in dental offices to provide support and comfortable positioning for patients during dental procedures.