...nonprofit business becomes more and more commercialization and aims at earning large amount of profits. This article mainly discussed about the trend that nonprofit business is turning into the commercial business gradually. According to the article, the reason that we should concern about this obvious change is “the diversity of contributions modern democratic societies thought to make (Child, 2010, p. 2). Moreover, this article talked about how nonprofit business relies on commercial business, which is through unrelated business income, share of revenue growth and program service revenue and its variants. The first way is through unrelated business income, which is “income from a trade or business, regularly carried on, that is not substantially related to the charitable, educational, or other purpose that is the basis for the organization’s exemption” (Internal Revenue Service 2007:3-4). The unrelated business income reflects that nonprofit business already made a big progress on its commercial business. Second, according to Child, he said nonprofit almanac is a good way to look for the evidence of the commercial turn. Based on nonprofit almanac, we could tell the percent of total revenue from private sector payments and percent growth attributable to private sector payments for some social and educational sectors. The last way Child mentioned in his article is investigating program service revenue and its variants. After nonprofit business turned into commercial business, those...
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...Project 1. BUSINESS FORMATION a. What form would be required to form a Limited Liability Company? Articles of Organization b. What form would be required to form a Corporation? Articles of Incorporation c. Does an attorney need to sign the organization documents for an LLC? No but it may be in the best interest for the organization d. Does an attorney need to sign the organization documents for a Corporation? No, but it may be in the best interest for the organization e. What are the filing fees associated with filing an LLC and a Corporation? $110 for both and the CL-1 is $25 f. Are there annual fees to be paid to the state for an LLC or Corporation? Both LLC and Corporation have to pay $10 fees g. Does a Corporation doing business in SC but formed in another state have to register with the State of South Carolina? Yes, they are required to register every location that their business resides in h. Does a General Partnership have to file anything with the Secretary of State? No. 2. BUSINESS LICENSES AND TAX REGISTRATION For this portion- I chose to run an S CORP for my liquor store which sells tobacco, wine, and liquor. My three employees are my cashier, stocker, and manager. a. In Charleston, all businesses are required to have an annual business license for each location. There is a five step process for obtaining this business license. First- Zoning Compliance. The city encourages every business to confirm the...
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...Approach to Reforming the Federal Tax System On February 3, 2013 marked the 100th birthday of the 16th Amendment. The 16th Amendment paved the way for the creation of the federal income tax that continues to this day to have far reaching repercussions on the American tax payer. Before the ratification of the 16th Amendment, the birth of the federal income tax dates back to the Civil War. In order to finance the Civil War, President Abraham Lincoln signed into law Revenue Act of 1861 on August 5, 1861. The Revenue Act consisted of a flat tax rate of 3% on income above $800 and 5% on individuals living outside of the United States. On July 1, 1861 United States Congress repealed the Revenue Act of 1861 and replaced it with the Revenue Act of 1862. The Revenue Act of 1862 introduced a progressive tax and established the Bureau of Internal Revenue. In 1872 Congress repealed the Revenue Act of 1862. One again elected officials tried to revive the federal income tax in 1894. However, in 1895 the federal income tax was declared unconstitutional by the U.S. Supreme Court because the tax was not apportioned according to the population of each state. In an address to Congress on June 16, 1909 President Howard Taft proposed that Congress consider a new amendment to the Constitution. “I recommend, then, first, the adoption of a joint resolution by two-thirds of both Houses, proposing to the States an amendment to the Constitution granting to the Federal Government the right to...
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...Tax Law and Accounting Craig ACC 483 June 21, 2010 Jeff Hough Modern taxation comes from a long history of changes in the United States beginning with the Revenue Act of 1861 that was designed to assist with funding the Civil War. This tax was repealed 10 years later. “In 1894 Congress enacted a flat rate federal income tax, which was ruled unconstitutional the following year by the U.S. Supreme Court because it was a direct tax not apportioned according to the population of each state” (Terrell, 2009, History of Tax Law, para. 2). In 1913, the Sixteenth Amendment enacted modern day federal income tax in the United States. Before 1913, the federal government relied on customs duties and excise taxes as its source of income. As America developed the U.S. government needed additional income to sustain its operations. The Sixteenth Amendment consisted of just one sentence: “The Congress shall have the power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration” (Pope, Anderson, & Kramer, 2010, p. 1-3). The implementation of income tax remains one of the most remarkable institutions created in this era. Modern Income Tax Statutes The primary objective of modern tax statutes is to generate revenue to sustain governmental operations. The largest source of federal revenues is individual income taxes. Other sources come from corporate income taxes and Social...
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...major objective of the Federal income tax law is to raise revenue, social considerations and economic objectives also affect the tax law. True False 3. All organizations that are exempt from Federal income tax are exempt under § 501(c)(3). True False 4. An exempt entity in no circumstance is subject to Federal income tax. True False 5. An entity satisfies the “not-for-profit” requirement for exempt status if its total expenses for the year exceed its gross income. True False 6. If an organization qualifies for exempt status for Federal income tax purposes, it is exempt from all Federal income taxes. True False 7. Engaging in a prohibited transaction can result in an exempt organization being subject to Federal income tax, but cannot cause it to lose its exempt status unless the exempt organization repeats the prohibited transaction. True False 8. The League of Women Voters is a § 501(c)(3) organization. True False 9. George is running for mayor of Culpepper. The members of Third Church adamantly oppose his candidacy. They would like to run a political advertisement in the local newspaper opposing his candidacy. The newspaper ad would have no effect on Third Church’s exempt status because the ad opposes George; it does not support his opponent. True False 10. An exempt organization that is eligible to elect under § 501(h) to engage in lobbying activities on a limited basis incurs no tax liability from lobbying...
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...ARKANSAS STARTING A NEW BUSINESS An Educational Brochure for Arkansas Taxpayers Department of Finance and Administration P. O. Box 1272 Little Rock, AR 72203 TABLE OF CONTENTS Page SALES & USE TAX .......................................................................................................... 1 INCOME TAX WITHHOLDING....................................................................................... 3 MISCELLANEOUS TAX................................................................................................... 5 INDIVIDUAL ESTIMATED TAX ..................................................................................... 6 PARTNERSHIPS AND LLC’s .......................................................................................... 8 SUBCHAPTER S CORPORATIONS ............................................................................. 10 CORPORATION INCOME TAX .................................................................................... 13 MOTOR FUEL TAX ........................................................................................................ 16 MOTOR CARRIER FUEL TAX ..................................................................................... 16 ELECTRONIC FUNDS TRANSFER ............................................................................. 17 OTHER IMPORTANT STATE CONTACTS ................................................................. 18 OTHER IMPORTANT CONTACTS .........................................
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...major objective of the Federal income tax law is to raise revenue, social considerations and economic objectives also affect the tax law. True False 3. All organizations that are exempt from Federal income tax are exempt under § 501(c)(3). True False 4. An exempt entity in no circumstance is subject to Federal income tax. True False 5. An entity satisfies the “not-for-profit” requirement for exempt status if its total expenses for the year exceed its gross income. True False 6. If an organization qualifies for exempt status for Federal income tax purposes, it is exempt from all Federal income taxes. True False 7. Engaging in a prohibited transaction can result in an exempt organization being subject to Federal income tax, but cannot cause it to lose its exempt status unless the exempt organization repeats the prohibited transaction. True False 8. The League of Women Voters is a § 501(c)(3) organization. True False 9. George is running for mayor of Culpepper. The members of Third Church adamantly oppose his candidacy. They would like to run a political advertisement in the local newspaper opposing his candidacy. The newspaper ad would have no effect on Third Church’s exempt status because the ad opposes George; it does not support his opponent. True False 10. An exempt organization that is eligible to elect under § 501(h) to engage in lobbying activities on a limited basis incurs no tax liability from lobbying...
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...| How Businesses Are Taxed | Businesses have to pay federal income tax just like individuals. However, different business entities are taxed differently. Understanding these basic differences will help you to identify federal income tax obligations as you conduct business with different business formations. Income taxation can impact commercial transactions between different kinds of businesses, such as sole proprietorships, partnerships, franchised, and corporations. Sole proprietorships A sole proprietorship is a small business owned by a single individual. The owner is the business; the business is not a separate legal entity. The federal income tax obligation to be aware of when conducting business with sole proprietorships is that the sole proprietorship pays income tax only once on the income of the business, which the owner reports on his personal income tax form. There is no separate tax-filing requirement for the business itself. Since the sole proprietor is the business, he is responsible for the same income tax obligations as are most individuals. He does get the benefit of all business deductions, which he can write off against his personal income. In a good year, the owner of a sole proprietorship may want to make capital purchases, and defer payments from creditors until after the end of the tax year, so that he can offset assets and liabilities against his tax burden. Partnerships In a partnership, two or more people agree to combine their money, ideas, skills...
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...Concepts in Federal Taxation 2011 Murphy Higgins 18th Edition Solutions Manual Click here to download immediately!!! http://www.testbankpdf.com/taxation/concepts-in-federal-taxation-2011murphy-higgins-18th-edition-solutions-manual/ ----------------------------------------------------------------------Concepts Concepts Concepts Concepts in in in in Federal Federal Federal Federal Taxation Taxation Taxation Taxation 2011 2011 2011 2011 Murphy Murphy Murphy Murphy Higgins Higgins Higgins Higgins 18th 18th 18th 18th Edition Edition Edition Edition Solutions Solutions Solutions Solutions Manual Manual Manual Manual -------------------------------------------------------------------------***THIS IS NOT THE ACTUAL BOOK. YOU ARE BUYING the Solution Manual in e-version of the following book*** Name: Concepts in Federal Taxation 2011 Author: Murphy Higgins Edition: 18th ISBN-10: 0538467924 Type: Solutions Manual - The file contains solutions and questions to all chapters and all questions. All the files are carefully checked and accuracy is ensured. - The file is either in .doc, .pdf, excel, or zipped in the package and can easily be read on PCs and Macs. - Delivery is INSTANT. You can download the files IMMEDIATELY once payment is done. If you have any questions, please feel free to contact us. Our response is the fastest. All questions will always be answered in 6 hours. This is the quality of service we are providing and we hope to be your helper. Delivery is in the next moment...
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...Chapter 01 An Introduction to Tax True / False Questions 1. | Taxes influence many types of business decisions but generally do not influence personal decisions. True False | 2. | Taxes influence business decisions such as where a business should locate or how a business should be structured. True False | 3. | Tax policy rarely plays an important part in presidential campaigns. True False | 4. | Margaret recently received a parking ticket. This is a common example of a local tax. True False | 5. | George recently paid $50 to renew his driver's license. The $50 payment is considered a tax. True False | 6. | A 1% charge imposed by a local government on football tickets sold is not considered a tax if all proceeds are earmarked to fund local schools. True False | 7. | One key characteristic of a tax is that it is a required payment to a governmental agency. True False | 8. | Common examples of sin taxes include the taxes imposed on airline tickets and gasoline. True False | 9. | One benefit of a sin tax (e.g., a tax on cigarettes) is that it should increase the demand for the products being taxed. True False | 10. | In addition to raising revenues, specific U.S. taxes may have other objectives (e.g., economic or social objectives). True False | 11. | The two components of the tax calculation are the tax rate and the taxpayer. True False...
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...CHAPTER 20--INCOME TAXATION OF TRUSTS AND ESTATESCHAPTER 20--INCOME TAXATION OF TRUSTS AND ESTATES Student: ___________________________________________________________________________ 1. Tax planning motivations usually are secondary to other objectives in deciding whether to create a trust. True False 2. A trust might be used by one running for a political office. True False 3. Like a corporation, the fiduciary reports and pays its own Federal income tax liability. True False 4. An estate’s income beneficiary generally must wait until the entity is terminated by the executor to receive any distribution of income. True False 5. With respect to a trust, the terms creator, donor, and grantor are synonyms. True False 6. Corpus, principal, and assets of the trust are synonyms. True False 7. If provided for in the controlling agreement, a trust might terminate when the income beneficiary reaches age 35. True False 8. The decedent’s estate must terminate within four years of the date of death. True False 9. Trusts can select any fiscal Federal income tax year. True False 10. A complex trust pays tax on the income that it retains and adds to corpus. True False 11. A complex trust automatically is exempt from the Federal AMT. True False 12. The first step in computing an estate’s taxable income is the determination of its gross income for the year. True False 13. Generally, capital...
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...Chapter 01 An Introduction to Tax SOLUTIONS MANUAL Discussion Questions (1) [LO1] Jessica’s friend Zachary once stated that he couldn’t understand why someone would take a tax course. Why is this a rather naïve view? Taxes are a part of everyday life and have a financial effect on many of the major personal decisions that individuals face (e.g., investment decisions, evaluating alternative job offers, saving for education expenses, gift or estate planning, etc.). (2) [LO1] What are some aspects of business that require knowledge of taxation? What are some aspects of personal finance that require knowledge of taxation? Taxes play an important role in fundamental business decisions such as the following: * What organizational form should a business use? * Where should the business locate? * How should business acquisitions be structured? * How should the business compensate employees? * What is the appropriate mix of debt and equity for the business? * Should the business rent or own its equipment and property? * How should the business distribute profits to its owners? One must consider all transaction costs (including taxes) to evaluate the merits of a transaction. Common personal financial decisions that taxes influence include: choosing investments, retirement planning, choosing to rent or buy a home, evaluating alternative job offers, saving for education expenses, and doing gift or estate planning. ...
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...Chapter 1 An Introduction to Tax SOLUTIONS MANUAL Discussion Questions: 1) [LO1] Jessica’s friend Zachary once stated that he couldn’t understand why someone would take a tax course. Why is this a rather naïve view? Taxes are a part of everyday life and have a financial effect on many of the major personal decisions that individuals face (e.g., investment decisions, evaluating alternative job offers, saving for education expenses, gift or estate planning, etc.). 2) [LO1] What are some aspects of business that require knowledge of taxation? What are some aspects of personal finance that require knowledge of taxation? Taxes play an important role in fundamental business decisions such as the following: • What organizational form should a business use? • Where should the business locate? • How should business acquisitions be structured? • How should the business compensate employees? • What is the appropriate mix of debt and equity for the business? • Should the business rent or own its equipment and property? • How should the business distribute profits to its owners? One must consider all transaction costs (including taxes) to evaluate the merits of a transaction. Common personal financial decisions that taxes influence include: choosing investments, retirement planning, choosing to rent or buy a home, evaluating alternative job offers, saving for education...
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...dynamic because tax law changes so freque ntly. o Rate of change reflects fact that economic and poli tical assumptions on which tax structures are based are constantly ev olving. Tax – Payment to support the cost of government. o Differs from fine or penalty because tax is not int ended to deter or punish unacceptable behavior. o Taxes, on the other hand are compulsory rather than voluntary on part of the payer. o Differs from user’s fee because payment of tax does not entitle payer to specific good or service in reutnr. o Citizens receive government benefits for tax dollar s but the value of those benefits is not correlated to the tax the per son must pay. o NOT an assessment of benefits, but a means of distr ibuting burden and cost of government. o Taxpayer “entitled to benefit derived from enjoymen t of privileges of living in organized society, established and safe g uarded by devotion of taxes to public purposes.” 2 Taxpayer – Any person or organization required by law to pay a tax to a governmental authority. o Person – Natural persons and corporations. o Corporations are entities organized under law of ju risdiction and enjoy same legal rights, privileges, and protection s as individuals. o Taxing jurisdictions uniformly regard corporations as entities separate and distinct from shareholders and as taxp ayers in their own right. Incidence of Tax – Refers to the...
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...SMITH, JD FROM: , CPA DATE: MARCH 25, 2012 SUBJECT: Recommendations of tax affairs for prospective clients John and Jane Smith Thank you for stopping by my office on Monday to discuss the relevant inquiries you and your wife Jane have while planning your 2011 tax return. I am only responding to the issues we discussed. I am confident that I can provide the best guidance to minimize your tax liability for I have been in practice for 5 yrs. As you know, there will be a billing for this consultation, but no tax return will be prepared unless an agreement is met. The issues to be discussed are as follows: 1. John Smith tax issues: a. How is the $300,000 treated for purposes of Federal tax income? b. How is the $25,000 treated for purposes of Federal tax income? c. What is your determination regarding reducing the taxable amount of income for both (a) and (b) above? 2. Jane Smith tax issues: a. What are the different tax consequences between paying down the mortgage (debt) and assuming a new mortgage (debt) for Federal income tax purposes? b. Can John and Jane Smith utilize a 1031 tax exchange to buy a more expensive house using additional money from John’s case? c. Does Jane have a business or hobby? Why is this distinction important? d. Would Jane (and John) realize better tax benefits if she had a separate business for her jewelry making activities? e. What tax benefits would John realize if he invested $15,000 in Jane’s jewelry making? f...
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