Calculate Mauve’s tax liability for the short period October 1, 2004, through January 31, 2005.

30. Mauve Corporation began operations as a farm supplies business and used a fiscal year ending September 30. The company gradually went out of the farm supplies business and into the mail-order Christmas gifts business. The company has received permission from the IRS to change to a fiscal year ending January 31, effective for the year ending January 31, 2005. For the short period October 1, 2004, through January 31, 2005, Mauve earned $25,000. Calculate Mauve’s tax liability for the short period October 1, 2004, through January 31, 2005.

What accounting method (cash or accrual) would you recommend for the following businesses?

34. What accounting method (cash or accrual) would you recommend for the following businesses? a. An incorporated medical practice with annual gross receipts of $12 million. b. A hardware store with annual gross receipts of less than $1 million. c. A building contractor, who builds single-family houses, with annual gross receipts of $3 million. d. A grocery store with annual gross receipts of $4.5 million.

Zack conducted his professional practice through Zack, Inc.

29. Zack conducted his professional practice through Zack, Inc. The corporation uses a fiscal year ending September 30 even though the business purpose test for a fiscal year cannot be satisfied. For the year ending September 30, 2005, the corporation paid Zack a salary of $180,000, and during the period January through September 2005, the corporation paid him a salary of $150,000. a. How much salary should Zack receive during the period October 1 through December 31, 2005? b. Assume Zack received only $30,000 salary during the period October 1 through December 31, 2005. What would be the consequences to Zack, Inc.?

Social security

Do you think social security benefits should be taxable? Why or why not? (Note – these benefits CAN be taxable and can be taxed as high as 85%).

Dividend

Do you think dividend income should be taxable? Why or why not?