Ch 1 Solutions

Powerful Essays
Chapter C:1

Tax Research

Discussion Questions

C:1-1 In a closed-fact situation, the facts have occurred, and the tax advisor’s task is to analyze them to determine the appropriate tax treatment. In an open-fact situation, by contrast, the facts have not yet occurred, and the tax advisor’s task is to plan for them or shape them so as to produce a favorable tax result. p. C:1-2.

C:1-2 According to the AICPA’s Statements on Standards for Tax Services, the tax practitioner owes the client the following duties: (1) to inform the client of (a) the potential adverse consequences of a tax return position, (b) how the client can avoid a penalty through disclosure, (c) errors in a previously filed tax return, and (d) corrective measures to be taken; (2) to inquire of the client (a) when the client must satisfy conditions to take a deduction and (b) when information provided by him or her appears incorrect, incomplete, or inconsistent on its face; and (3) not to disclose tax-related errors without the client’s consent. pp. C:1-32 through C:1-35.

C:1-3 When tax advisors speak about "tax law," they refer to the IRC as elaborated by Treasury Regulations and administrative pronouncements and as interpreted by federal courts. The term also includes the meaning conveyed by committee reports. p. C:1-7.

C:1-4 Committee reports concerning tax legislation explain the purpose behind Congress’ proposing the legislation. Transcripts of hearings reproduce the testimonies of the persons who spoke for or against the proposed legislation before the Congressional committees. Committee reports are sometimes used to interpret the statute. p. C:1-7.

C:1-5 Committee reports can help resolve ambiguities in statutory language by revealing Congressional intent. They are indicative of this intent. pp. C:1-7 and C:1-8.

C:1-6 The Internal Revenue Code of 1986 is updated for every statutory change to Title 26 subsequent to 1986. Therefore, it includes the post-1986

You May Also Find These Documents Helpful

  • Satisfactory Essays

    Chapter 1 BUSINESS COMBINATIONS Answers to Questions 1 A business combination is a union of business entities in which two or more previously separate and independent companies are brought under the control of a single management team. Three situations establish the control necessary for a business combination, namely, when one or more corporations become subsidiaries, when one company transfers its net assets to another, and when each combining company transfers its net assets to a newly…

    • 1842 Words
    • 8 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Ch 9 solutions

    • 6381 Words
    • 26 Pages

    Meaning of Slack Variables. Slack variables have an important physical interpretation and represent a valuable commodity, such as unused labor, machine time, money, space, and so forth. Teaching Suggestion 9.2: Initial Solutions to LP Problems. Explain that all initial solutions begin with X1 ϭ 0, X2 ϭ 0 (that is, the real variables set to zero), and the slacks are the variables with nonzero values. Variables with values of zero are called nonbasic and those with nonzero values are said to be…

    • 6381 Words
    • 26 Pages
    Satisfactory Essays
  • Good Essays

    Ch 10 Solutions

    • 17388 Words
    • 152 Pages

    Equipment ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC) Topics Questions Brief Exercises 1, 2, 3, 4, 5, 13 Concepts Problems for Analysis 1. Valuation and classification of land, buildings, and equipment. 1, 2, 3, 4, 6, 7, 12, 13, 15, 21 2. Self-constructed assets, capitalization of overhead. 5, 8, 20, 21 4, 6, 12, 16 3. Capitalization of interest. 8, 9, 10, 11, 2, 3, 4 13, 21 4, 5, 7, 8, 9, 10, 16 1, 5, 6, 7 3 4. Exchanges of assets. 12, 16, 17 8, 9, 10, 11, 12 3, 11, 16, 17, 18, 19…

    • 17388 Words
    • 152 Pages
    Good Essays
  • Satisfactory Essays

    Ch 3 Solution

    • 7500 Words
    • 30 Pages

    Module 3 Accounting Adjustments and Constructing Financial Statements DISCUSSION QUESTIONS Q3-1. The fiscal year is the annual accounting period that a firm adopts. A firm that uses December 31 as its year-end is on a calendar-year basis. Traditionally, fiscal years that end in January through the end of May, are labeled as the prior calendar year. For example, a fiscal year ending January 31, 2010 would be labeled fiscal 2009 because the bulk of the operations occurred in calendar 2009…

    • 7500 Words
    • 30 Pages
    Satisfactory Essays
  • Good Essays

    3101 MSOM 3rd in-class Group Assignment (Mod B and Ch 4) Q1) 39) A linear programming problem that aims to minimize cost, has two constraints 2X + 4Y ≥ 100 and 1X + 8Y ≤ 100. Which of the following statements about its feasible region is true? (2-points) A) There are four corner points including (50, 0) and (0, 12.5). B) The two corner points are (0, 0) and (50, 12.5). C) The feasible region is triangular in shape, bounded by (50, 0), (33-1/3, 8-1/3), and (100, 0). D) The graphical origin (0, 0) is…

    • 608 Words
    • 4 Pages
    Good Essays
  • Better Essays

    Ch 11 Solutions

    • 7520 Words
    • 31 Pages

    Department and Joint Cost Allocation Solutions to Review Questions 1. Companies allocate costs to estimate or assess the costs of their activities (products, processes, etc.). It is an estimate and subject to the problem that cost allocation contains an arbitrary element. Not allocating costs, however, is also an estimate—an estimate of zero. This may be appropriate for some decisions, but not for others. Some of the disadvantages (costs) include: (1) Additional bookkeeping; (2)…

    • 7520 Words
    • 31 Pages
    Better Essays
  • Good Essays

    Ch 2 Solution

    • 3178 Words
    • 13 Pages

    CHAPTER 2 Mechanics of Futures Markets Practice Questions Problem 2.8. The party with a short position in a futures contract sometimes has options as to the precise asset that will be delivered, where delivery will take place, when delivery will take place, and so on. Do these options increase or decrease the futures price? Explain your reasoning. These options make the contract less attractive to the party with the long position and more attractive to the party with the short position. They therefore…

    • 3178 Words
    • 13 Pages
    Good Essays
  • Powerful Essays

    Ch. 16 Solutions

    • 1258 Words
    • 6 Pages

    Chapter 16 Networking Types, Devices, and Cabling Reviewing the Basics 1. What type of network topology is used when five switches are used on a small LAN and each switch connects to multiple computers on the LAN? A star bus topology or a hybrid topology 2. Place the following networking technologies in the order of their highest speed, from slowest to fastest: WiMAX, dial-up networking, cable Internet, Fast Ethernet, 3G Dial-up networking, 3G, cable Internet, WiMAX, Fast Ethernet 3. What…

    • 1258 Words
    • 6 Pages
    Powerful Essays
  • Good Essays

    Ch 9 Solution

    • 2280 Words
    • 10 Pages

    Chapter 9 - Materiality and Risk ← Multiple Choice Questions From CPA Examinations 9-22 a. (4) b. (4) 9-23 a. (1) b. (1) c. (1) 9-24 a. (2) b. (3) c. (1) 9-25 a. The justification for a lower preliminary judgment about materiality for overstatements is directly related to legal liability and audit risk. Most auditors believe they have a greater legal and professional responsibility to discover overstatements of owners' equity than understatements because users are likely to be more…

    • 2280 Words
    • 10 Pages
    Good Essays
  • Good Essays

    Chapter 1 An Overview of Financial Management ANSWERS TO BEGINNING-OF-CHAPTER QUESTIONS 1-1 The primary goal is assumed to be shareholder wealth maximization, which translates to stock price maximization. That, in turn, means maximizing the PV of future free cash flows. Maximizing shareholder wealth requires that the firm produce things that customers want, and at the lowest cost consistent with high quality. It also means holding risk down, which will result in a relatively low…

    • 4821 Words
    • 20 Pages
    Good Essays