Determine Sam and Sally’s taxable income for 2005.

Sam and Sally, his spouse, file a joint return. They have five dependent children. For 2005, they have the following items: Salaries $60,000 Interest income 5,000 Casualty loss (after $100 reduction) 40,000 Other itemized deductions 21,000 a. Determine Sam and Sally’s taxable income for 2005. b. Determine Sam and Sally’s NOL for 2005.

Mable and Jack file a joint return

34. Mable and Jack file a joint return. For the current year, they had the following items: Salaries $180,000 Loss on sale of § 1244 stock acquired two years ago 95,000 Gain on sale of § 1244 stock acquired six months ago 12,000 Nonbusiness bad debt 16,000 Determine their AGI for the current year.

Calculate the salary deduction if Falcon is a cash basis taxpayer.

38. Falcon, Inc., paid salaries of $500,000 to its employees during its first year of operations. At the end of the year, Falcon had unpaid salaries of $45,000. a. Calculate the salary deduction if Falcon is a cash basis taxpayer. b. Calculate the salary deduction if Falcon is an accrual basis taxpayer.

Calculate Carlton’s AGI.

34. Carlton received the following income and incurred and paid the following expenses during the current year: Salary income $72,000 Dividend income 4,000 Interest income 3,000 Contributions to First Church 2,500 Real estate taxes on personal residence 1,800 Alimony paid to former spouse 12,000 Contribution to traditional IRA 3,000 Mortgage interest on personal residence 6,000 State income taxes 3,500 Loss on the sale of stock 900 Carlton is not yet eligible to participate in his employer’s retirement plan. a. Calculate Carlton’s AGI. b. Should Carlton itemize deductions from AGI or take the standard deduction?

Income Tax Acct.

Compare and contrast GAAP and income tax accounting. 1. Describe how they are similar and why there are differences. 2. Also, include specific examples of how and when to apply the principles of both types of accounting.