For Each Tax Treatment Described Below,indicate Which Tax Concept(s)that Is

question 120

Essay

For each tax treatment described below,indicate which tax concept(s)that is (are)responsible for the treatment.
a.Kimberly,an accrual basis taxpayer,validly took a bad debt deduction of $850 in 2016 for an account receivable due from Cathy.In 2017,Cathy sent Kimberly a check for $500.Kimberly must include the $500 in her 2017 taxable income.
b.Randall,a cash basis taxpayer,receives $1,400 from Craig in December 2017.The $1,800 was for payment of the first and last month's rent ($700 per month)and a $400 cleaning deposit on a building Craig rented from Randall.Randall includes $1,400 in his 2017 taxable income.
c.Matt pays $14,000 rent on the office he uses in his computing firm.Matt is allowed to deduct the $14,000 on his tax return.
d.Samantha sells stock for $9,000 that she purchased two years earlier for $8,000.Samantha must report a capital gain of $1,000 on the sale.
e.Rosanne sells jewelry and some old clothes during the year.The jewelry cost $750 and is sold for $800.The clothes cost $500 and are sold for $150.Rosanne must include the $50 gain on the sale of her jewelry in her taxable income,but is not allowed to deduct the loss.

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Definitions:

Retail Price

The price at which goods are sold to the public, typically higher than the wholesale price.

Mark-up

Increment on the buying price of products targeted to offset operational costs and profits.

Selling Price

The price at which a product or service is sold to the consumer.

Mercola

A brand and website known for its health-based products and controversial wellness information.