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Pie
3 years ago
7

Kent "Flounder" Dorfman is a full-time student at Faber College. He is a senior and a member of Delta Tau Chai fraternity. The D

eltas awarded Kent a $35,000 scholarship called "The Dean Wormer Double Secret Probation Memorial Scholarship". In the current year, Kent pays the following amounts to attend Faber College: Tuition - $26,000; Required lab fees - $300;
Required books and supplies - $1,000; Room and board - $7,500. How much of the scholarship, if any, is taxable for federal income tax purposes?

Explain how you arrived at your answer and cite at least one section of the Internal Revenue Code to support your answer.

How much of the scholarship, if any, is NOT taxable for federal income tax purposes?

Explain how you arrived at your answer.
Business
1 answer:
Burka [1]3 years ago
6 0

Answer

The answer and procedures of the exercise are attached in the following archives.

Explanation  

As per §117(b)(2) a qualified scholarship that is solely used for qualified tuition and related expenses like fees, books and supplies that is necessary for such course in which admission is taken, related tuition fees and associated expenses are not taxable.

On the other side expenses on rooms and boarding are not qualified expenses so any amount spent on it is fully taxable. Another condition is that scholarship given should not be an exchange of service.

<em>You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.  </em>

<em />

<em />

Download xlsx
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MrRissso [65]

Answer:

Emily has a basis of $60,000 in the shares of Red Corporation.

Explanation:

Emily's basis for Red Corporation's stock = real estate ($40,000)  + service ($20,000) = $60,000

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Even though both Emily and Sarah received 600 shares each, the basis for her tax calculations are different.

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3 years ago
MG Lighting had sales of 500 units at $100 per unit last year. The marketing manager projects a 15 percent decrease in unit volu
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Answer:

The answer is: Projected net sales for this year are $45,254

Explanation:

The current total sales for MG Lighting are $50,000 (= 500 units x $100 per unit).

Next year their products will have a $10 increase (10%), so the unit price will be $110.

Due to the price increase, the number of units sold will decrease by 15%, to a total of 425 units.

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3 years ago
What are some characteristics of an informal group?
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3 years ago
A company incurred the following costs associated with the purchase of a piece of land that it will use to re-build an office bu
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Answer:

$651,300

Explanation:

Cost of an item of property, plant and equipment comprises of purchase price and any cost directly attributable to bringing the asset to the location and condition for operation as intended by management.

<u>Calculation of the cost of  purchase of the land:</u>

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3 years ago
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Answer:

$437,000

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3 years ago
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