The Hosta Trust reports gross rent income of $97,400, expenses attributable to the rents of...
Question:
The Hosta Trust reports gross rent income of $97,400, expenses attributable to the rents of $68,180, and tax-exempt interest from state bonds of $24,350. Under the trust agreement, the trustee is to pay 20% of the annual trust accounting income to the American Red Cross, a qualifying charitable organization.
What is Hosta Trust's charitable deduction?
Charitable contributions deductions
When a taxpayer contributes part of his/her income to a qualified tax-exempt organization, a specific tax deduction is allowable to lower that person's liability.
Answer and Explanation: 1
Become a Study.com member to unlock this answer! Create your account
View this answerFirst, calculate the net income of Hosta Trust as shown below;
= Gross rent income + Interest from state bond - Expenses attributable to rents
=...
See full answer below.
Ask a question
Our experts can answer your tough homework and study questions.
Ask a question Ask a questionSearch Answers
Learn more about this topic:
Get access to this video and our entire Q&A library
Income Tax: Tax Liability & Deductions
from
Chapter 3 / Lesson 5
17K
Learn what income tax liability is. Find out what taxable and adjusted gross income are, discover how to calculate tax liability, and examine common deductions.
Related to this Question
- The Hosta Trust reports gross rent income of $194,000, expenses attributable to the rents of $135,800, and tax-exempt interest from state bonds of $48,500. Under the trust agreement, the trustee is to pay 20% of the annual trust accounting income to the A
- The Hosta Trust reports a 2015 gross rental income of $100,200, expenses attributable to the rents of $70,140, and tax-exempt interest from state bonds of $25,050. Under the trust agreement, the trustee is to pay 20% of the annual trust accounting income
- Which of the following deductions does not affect trust accounting income? a) rental expenses. b) attorney's fees allocable to income. c) trustee fees allocable to income. d) trustee fees allocable to principal.
- Which of the following deductions does not affect trust accounting income? a. rental expenses. b. attorney's fees allocable to income. c. trustee's fees allocable to income. d. trustee's fees allocable to principal.
- Trust X requires that the trustee make the following payments each year: $5,000 to charity (out of income) 20,000 to A (out of income only) 12,000 to B (annuity out of income, then principal) Assume that the trust has accounting income and gross taxab
- The trustee of the Pieper Trust can distribute any amount of accounting income and corpus to the trust's beneficiaries, Lydia and Kent. This year, the trust incurred the following: Taxable interest in
- A trust reports the following results: Dividend income $20,000 Capital gains $10,000 Tax-exempt interest $10,000 Trustee fees $3,000 All of the items above are allocated to income. Calculate the maximum amount of trustee fees that are deductible.
- Compute the Federal income tax liability for the Kim Trust. The trustee reports the following transactions for the 2011 tax year. The trustee accumulates all accounting income for the year. Operating income from a business $400,000 Dividend income, all
- The Doyle Trust reports distributable net income for the year of $100,000 and no income from tax-exempt sources. Under the terms of the trust instrument, the trustee must distribute $20,000 to Roger a
- The Allwardt Trust is a simple trust that correctly uses the calendar year for tax purposes. Its income beneficiaries (Lucy and Ethel) are entitled to the trust's annual accounting income in shares of one-half each. For the current tax year, Allwardt repo
- A complex trust has taxable income of $29,900 in 2015. The $29,900 includes $5,000 of rental income and $25,000 of taxable interest income, reduced by the $100 personal exemption. The trust makes no d
- A pro-rata portion of estate/trust deductions: a. need not be allocated to tax exempt income. b. is allocated to tax exempt income to the extent any amount of the deductions remains after allocation to taxable income. c. must be allocated to tax exempt in
- Tax Rates. Latesha, a single taxpayer, had the following income and deductions for the tax year 2015: Income: Salary $80,000 Business Income 25,000 Interest income from bonds 10,000 Tax-exempt bo
- The Allwardt Trust is a simple trust and correctly uses the calendar year for tax purposes. It's income beneficiaries (Lucy and Ethel) are entitled to the trust's annual accounting income in share of
- Latesha, a single taxpayer, had the following income and deductions for the tax year 2019: Income: Salary $100,000 Business Income 25,000 Interest income from taxable bonds 10,000 Tax-exempt bond interest 5,000 Total income 140,000 Deductions: Business e
- A review of Bearing's Year 2 records disclosed the following tax information: Wages $30,000 Taxable interest and qualifying dividends 4,000 Schedule C trucking business net income 32,000 Rental (loss) from residential property (35,000)
- Loriann's, a single taxpayer, had the following income and deductions for the tax year: Income: Salary $61,000 Business income $30,000 Interest income from taxable bonds $15,000 Tax-exempt bond interest $3,500 Total income $109,500 Deductions: Business
- A simple trust has ordinary income of $56,000, a long-term capital gain of $20,000 (allocable to corpus), and a trustee commission expense of $5,500 (payable from corpus). The two-income beneficiaries, Woo and Jae, are entitled to the trust's annual accou
- During the current year, Donna, a single taxpayer, reports the following items income of income and expenses: Income: Salary $86,000 Municipal bond interest 1,300 Bank account interest 2,300 Alimony received 24,000 Capital gain on an asset held less
- Compute the Federal income tax liability for the Valerio Trust. The entity reports the following transactions for the 2014 tax year. The trustee accumulates all accounting income for the year. \\ Operating income from a business $ 500,000.00 Dividend in
- Investment advisory fees paid by an estate or trust: a. are subject to the 4% reduction required by section 67 IRC. b. are fully tax deductible to the extent listed without objection on a trust accounting. c. are fully tax deductible. d. none of the above
- In the previous year, a firm failed to record premium amortization of $40,400 and $29,600, respectively, on its bonds payable and held to maturity bond investments. These errors affect both incomes before tax and taxable income. The firm's tax rate is 40%
- A complex trust receives taxable interest of $12,000, taxable dividends of $4,000, capital gains of $4,000 and pays a trustee fee of $1,000, all charged to income. The trustee makes a discretionary distribution to Tom of $8,000. How much of the distributi
- Compute the federal income tax liability for the Valerio Trust. The entity reports the following transactions for the 2015 tax year. The trustee accumulates all accounting income for the year.
- The NRBE Trust is a simple trust that correctly uses the calendar year for tax purposes. Its income beneficiaries (Nancy, Rita, Betty, Ernie) are entitled to the trust's annual accounting income in sh
- During the current year, Plankton, a single taxpayer, reports the following items income of income and expenses Income Salary 86,000 Tax Exempt interest 1,300 Bank account interest 2,300
- State whether each situation is a deferral or an accrual. a. Unrecorded interest on savings bonds is $765. b. Property taxes that have been incurred but that have not yet been paid or recorded amount to $1,034. c. Legal fees of $2,890 were collected in ad
- The Allwardt Trust is a simple trust that correctly uses the calendar year for tax purposes. Its income beneficiaries (Lucy and Ethel) are entitled to the trust's annual accounting income in shares of one-half each. For the current tax year, Allwardt rep
- Estates a. unlike trusts, are not required to pay estimated income taxes. b. are not required to pay estimated income taxes on capital gain income. c. are not required to pay estimated income taxes in their first two years. d. are not required to pay
- Tax Rates. Latesha, a single taxpayer, had the following income and deductions for the tax year 2016: INCOME: |Salary |$80,000 |Business Income |25,000 |Interest income from bonds |10,000 |Tax-exe
- In 2016, DFS Medical Supply collected rent revenue for 2017 tenant occupancy. For income tax reporting, the rent is taxed when collected. For financial statement reporting, the rent is recorded as de
- Which of the following is true of property taxes? a. Property taxes are not deductible by the trust or estate if imposed on personal property. b. Property taxes are deducted in computing the trust or estate's adjusted gross income. c. Property taxes ma
- Pat is the partner on the audit of Hardwood Emporium Ltd. As part of the completion of the audit, Pat works with the company to determine the likely income tax liability for the year, including helping to prepare the company's income tax returns. Pat bill
- Income before taxes = $900,000 Income before taxes included the following: Interest income of $80,000 (from municipal bonds) Rental income was collected in advance in 2013 and earned in 2014 = $20,000 Depreciation per books = $40,000 and per income taxes
- During the fiscal year 2012, Dioubate Cie earned $10,000 of interest revenue on an investment in a tax-free municipal bond. Which of the following items would be increased by the municipal bond revenue? A. Pre-Tax Income B. Income Tax Expense C. Taxable
- The Allwardt Trust is a simple trust. Its income beneficiaries (Lucy and Ethel) are entitled to the trust's annual accounting income in shares of one-half each. For the current tax year, Allwardt reports the following:
- Attorney's fees: a. can only be deducted on the Form 1041 to the extent they exceed 2% of adjusted gross estate or trust income. b. can only be deducted on an estate's federal estate tax return if an estate tax return is required. If no federal estate t
- Identify the type of account that applies to annual property taxes that are paid at the end of the year. A. Prepaid expense B. Accrued expense C. Unearned revenue D. Accrued revenue E. None of these
- The Palms company records a Deferred Tax Asset; it is likely that the DTA will not be realized due to doubtful future incomes. Palms property records an Allowance account. Recording the allowance will increase a. Income Tax Expense b. Income Tax Payable c
- The Biltmore Trust is a simple trust. Crawford is its sole beneficiary. In the current year, the trust earns $17,125 in taxable interest and $42,813 in tax-exempt interest. In addition, the trust recognizes a $2,250 long-term capital gain. The trustee ass
- The Biltmore Trust is a simple trust. Crawford is its sole beneficiary. In the current year, the trust earns $3,200 in taxable interest and $8,000 in tax-exempt interest. In addition, the trust recognizes a $2,500 long-term capital gain. The trustee asses
- The Trotter Trust has the receipts and expenditures listed below for the current year. Assume the Uniform Act (1962) governs an item's classification as principal or income. The trustee's fee is charged one-half to principal and one-half to income. What i
- A review of Bradley's Year 2 records disclosed the following tax information. Wages = $18,000 Taxable interest and qualifying dividends = 4,000 Schedule C trucking business net income = 32,000 Rental (loss) from residential property = (35,000) Limited par
- Haag Cop's 2011 income statement showed pretax accounting income of $750,000. To compute federal income tax liability, the following 2011 data are provided: Income from exempt municipal bonds $30,000 Depreciation deducted for tax purposes in excess of de
- Selected balance sheet and income statement data for Green Tea, Inc., for the year ended December 31, 2011 are below. What is the company's times interest earned ratio? Income before provision for income taxes $814,725 Interest expense $16,419 Statutory
- A review of Bearing's Year 2 records disclosed the following tax information: Wages $ 20,000; Taxable interest and qualifying dividends 4,000; Schedule C trucking business net income 32,000; Rental (
- In 2016, Ryan Management collected rent revenue for 2017 tenant occupancy. For financial reporting, the rent is recorded as deferred revenue and then recognized as income in the period tenants occupy the rental property. But for income tax reporting it is
- In accordance with GASB 33, Accounting and Reporting for Nonexchange Transactions, which of the following revenues results from taxes assessed by a government on exchange transactions (a derived tax revenue?) a. Property tax revenues b. Fines and forfeits
- During the current year of 2018, Kent, a single taxpayer, reports the following items of income and expense: Income: Salary: $150,000 Dividends from Alta Corporation: $800 Interest income from a savings account: $1500 Rental income from a small apartment
- In its first tax year, the Wittmann Estate generated $50,000 of taxable interest income and $20,000 of tax-exempt interest income. It paid fiduciary fees of $7,000. The estate is subject to a 45% marginal estate tax rate and a 40% marginal income tax rate
- In 2013, Ryan Management collected rent revenue for 2014 tenant occupancy. For financial reporting, the rent is recognized as income in the period earned but for income tax reporting it is taxed when collected. The unearned portion of the rent collected i
- Beemer Trust has net accounting income and distributable net income of $100,000, $75,000 from taxable sources and $25,000 from tax-exempt sources. During the year, the trust distributes the entire amount ($100,000). The distribution deduction is A. $25,00
- Parkview West Inc. has gross income of $50,000, consisting of $37,000 of rent receipts and $13,000 of U.S. dividends. Rental deductions of $20,000 are claimed (interest, taxes, and cost recovery). $9,000 of dividends are paid to Susie and Sally, the only
- Angelena files as a head of household. In 2018, she reported $53,000 of taxable income, including a $12,100 qualified dividend. What is her gross tax liability, rounded to the nearest whole dollar amount? (Use the tax rate schedules.)
- Selected balance sheet and income statement data for Green Tea, Inc., for the year ended December 31, 2011, is below. Income before provision for income taxes $814,72 Interest expense $16,419 Statutory tax rate 35.2% Provision for income taxes $285,150 N
- In 2021, Ryan Management collected rent revenue for 2022 tenant occupancy. For financial reporting, the rent is recorded as deferred revenue and then recognized as revenue in the period tenants occupy the rental property. For tax reporting, the rent is ta
- For the year ended December 31, 2016, Fidelity Engineering reported a pretax accounting income of $997,000. Selected information for 2016 from Fidelity's records follows: Interest income on municipal bonds $36,000 Depreciation claimed on the 2016 tax retu
- ABC reports income tax expense of $800,000. Income tax payable at the beginning and end of the year are $50,000 and $70,000, respectively. What is the amount of cash paid for income taxes?
- At the beginning of the year, Mr. L put $50,000 cash into investment X. At the end of the year, he received a check for $2,800, representing his annual return on the investment. Mr. L's marginal tax rate on ordinary income is 39.6%. However, his return on
- Desjardin Landscaping's income statement reports a net income of $75,300, which includes deductions for interest expenses of $11,500 and income taxes of $34,900. Its times' interest earned is: A. 10.6 times B. 7.5 times C. 4.0 times D. 6.5 times E. 0
- Desjardin Landscaping's Income statement reports net Income of $74,800, which Includes deductions for Interest expense of $11,700 and Income taxes of $35,100. Its times interest earned is: a. 10.4 ti
- a)Excess of tax depreciation over book depreciation, $72,000. b)Rent revenue on the tax return is greater than financial statement rent revenue by $14,000. c) Warranty expense on financial statements exceeded warranty expense on tax return by $7,000.
- A trust that elected to be a small business trust (ESBT): a. is taxed as if it were a complex trust. b. computes taxable income from the S corporation separately from other sources of income. c. files multiple tax returns for each source of income. d. all
- Presented below is information from the annual report of Emporia Plastics, Inc. Operating income $532,150 Bond interest expense 135,000 397,150 Income taxes 183,432 Net income $213,718 Bonds payable $1,000,000 Common stock 875,000 Retained earnings 375,00
- A simple trust has an ordinary gross taxable income of $20,000. It also has $10,000 of capital gains which are allocated to trust principal under Florida's Principal and Income Act, Chapter 738, Florida Statutes. It pays a trustee fee of $5,000 which the
- An inexperienced accountant for Corfeld Corporation showed the following in Corfeld's 2012 income statement: Income before income taxes $300,000; Income tax expense $72,000; Extraordinary loss from flood (before taxes) $80,000; and Net income $168,000
- Gifts or bequests of specific sums of money or of specific property will distributed income tax free to the beneficiary if: a. the fiduciary so elects on the Form 1041 for the estate or trust. b. they can be paid or distributed only from the income of an
- A trust had table income in 2017 of $15,000, all of which consisted of ordinary income (no long term capital gains or qualified dividends). What is the trust's ordinary income tax for the year? a. $3,000.00 b. $3,232.50 c. $4,222.50 d. $5,940.00
- A review of Bradley's Year 2 records disclosed the following tax information. Wages $18,000 Taxable interest and qualifying dividends $4,000 Schedule C trucking business net income $32,000 Rental (loss) from residential property ($35,000) Limited partners
- A qualified revocable trust: a. is limited to a calendar income tax year. b. must be distributed 100% to a charitable beneficiary upon the death of the grantor. c. can be treated as an estate with respect to income tax return filing if the proper election
- Erimma is single with no dependents and had the following for 2014: Wages from Union Job $75,000 Loss from sale of stock held 4 years $-2,000 Qualifying Dividends $3,000 Exemption Deduction $3,950 Itemized Deductions $14,900 Assuming her ordinary income i
- Panther Trust has net accounting income and distributable net income of $100,000, $75,000 from taxable sources, and $25,000 from tax-exempt sources. During the year the trust makes a mandatory distribution to Julius and Steve of $50,000 each. The distribu
- All of the following are for AGI deductions except: A. Contributions to qualified retirement accounts B. Rental and royalty expenses. C. Charitable contributions. D. Business expenses for a self-employed taxpayer.
- Which of the following expenses would not be allowed in computing the adjusted gross income of a trust or estate? a. Fees paid for the preparation of the decedent's final individual income tax return. b. Appraisal fees paid to determine the value of an a
- In its first tax year, the Vasquez Estate generated $50,000 of taxable interest income and $30,000 of tax-exempt interest income. It paid fiduciary fees of $8,000. The estate is subject to a 35% marginal estate tax rate and a 40% marginal income tax rate.
- In 2017, AutoUSA Inc. received $4,600,000 of book income, including $20,000 of interest income from tax-exempt municipal bonds. AutoUSA reported $3,600,000 of regular business expenses. If it made $350,000 of estimated tax payments (prepayments) throughou
- Trust and estate distributions to charities, if otherwise allowable, can be deducted on the trust's or estate's 1041 a. but are limited to 30% of adjusted taxable income. b. but are limited to 50% of adjusted gross income. c. but are limited to 80% of
- For its first year of operations, Oakwood Corporation had pretax accounting income of $500,000 and taxable income of $410,000. The book-tax difference was due to two items: $10,000 of nontaxable municipal bond interest income, and depreciation expense whi
- Situation: In 2013, Ryan Management collected rent revenue for 2014 tenant occupancy. For financial reporting, the rent is recognized as income in the period earned but for income tax reporting it is taxed when collected. The unearned portion of the rent
- Cullumber Corp.'s 2018 income statement showed pretax accounting income of $2,600,000. To compute the federal income tax liability, the following 2018 data are provided: Income from exempt municipal bonds $101,000 Depreciation deducted for tax purposes i
- Sylvester files as a single taxpayer during 2016 and claims one personal exemption. He itemizes deductions for regular tax purposes. He paid charitable contributions of $7,700, real estate taxes of $1,100, state income taxes of $6,450, and interest on a h
- Sylvester files as a single taxpayer during 2015 and claims one personal exemption. He itemizes deductions for regular tax purposes. He paid charitable contributions of $7,000, real estate taxes of $1,000, state income taxes of $4,000, and interest on a h
- 1. Sunshine Company has book income of $250,000. It also has tax depreciation in excess of book depreciation of $30,000 and $10,000 of interest on tax-exempt bonds. Without regard to tax expense, what
- A taxpayer can invest $10,000 in a taxable 10- year bond that yields an annual pre- tax return of 6 percent or buy land (a capital asset) for $10,000 that is expected to increase at an annual pre- tax
- According to AASB 112, the prepayment of rent of $2,000 that is claimed as a tax deduction immediately upon payment (assuming an income tax rate of 30%) will give rise to: A. a Deferred Tax Liability
- Costigan Company's income statement for the year ended December 31, 2016, shows a pretax income of $300,000. The following items are treated differently on the tax return and on the income statement. Account Tax Return Income Statement Warranty expense $
- A temporary difference that would result in deferred tax liability is: a. Interest revenue on municipal bonds. b. Accrual of warranty expense. c. Excess of tax depreciation over financial accounting depreciation. d. Subscriptions received in advance.
- Desjardin Landscaping's income statement reports a net income of $74,100, which includes deductions for interest expense of $10,900 and income taxes of $33,700. Its time's interest earned is: a. 10.9 times b. 7.8 times c. 4.1 times d. 6.8 times e. 0.
- The revenue account of a state or local government is credited when ________. (a) property taxes are recorded (b) property taxes are collected (c) the budget is recorded at the beginning of the year (d) the account is closed at the end.
- On December 1, year 1, Peak Advertising (a calendar-year, accrual-basis taxpayer) received a $24,000 retainer fee for a two-year service contract. 1. How much income should Peak report in year 1 for tax and financial accounting? 2. How much income shoul
- In the normal course of performing their responsibilities, auditors often conduct audits or reviews of the following: 1. Federal income tax returns of an officer of the corporation to determine whether he or she has included all taxable income in his or h
- Grand Corporation reported pretax book income of $807,500. Tax depreciation exceeded book depreciation by $690,000. In addition, the company received $160,000 of tax-exempt municipal bond interest. The company's prior-year tax return showed taxable income
- Grand Corporation reported pretax book income of $600,000. Tax depreciation exceeded book depreciation by $400,000. In addition, the company received $300,000 of tax-exempt municipal bond interest. The company's prior-year tax return showed taxable income
- Zelda has been a widow for three years and files a return as a single taxpayer. Items of income received by her in 2014 were as follows: Interest on insurance dividends left on deposit in bank: 50 Interest on state income tax refund: 25 Gambling winnings:
- Sulvane Co. reports income of $300,000 from continuing operations before income taxes and a before-tax extraordinary loss of $80,000. All income is subject to a 30% tax rate. In the year's income statement, Sulvane would show the following line-item amoun
- Journalize the following: Receipt of $70000 by a taxpayer from a tenant for rental income. $15000 pertains to 2017, and $55000 pertains to 2018. a. If the taxpayer is on the cash basis for tax purposes b. If the taxpayer is on the accrual basis for tax pu
- Generally, deductions for adjusted gross income on an individual's tax return include all the following types of expenses except those: a. incurred in gambling activities. b. incurred in a trade or business. c. incurred in the production of rent income. d
- Sage Company has the following two temporary differences between its income tax expense and income taxes payable. 2017 2018 2019 Pretax financial income $848,000 $882,000 $933,000 Excess depreciation expense on tax return (29,600) (39,400) (9,900) Excess
- Make a journal entry for the following accounts: Estimated Revenues: Taxes Real Property $1,679,070 Interest and Penalties on Taxes 9,000 Licenses and Permits 600,000 Fines and Forfeits 410,000 Intergovernmental Revenue 275,000 Charges for
- Blue's Corps 2015 income statement showed pretax accounting income of $1,500,000. To compute the federal income tax liability, the following 2015 data are provided: | Income from exempt municipal bonds | $50,000 | Depreciation deducted for tax purposes i
Explore our homework questions and answers library
Browse
by subject