1 How are each of the Marginal Tax Rate, the Average Tax Rate, and the Effective
ID: 2497982 • Letter: 1
Question
1 How are each of the Marginal Tax Rate, the Average Tax Rate, and the Effective Tax Rates measured? Under which types of scenarios would you likely use each type of tax rate?
2,Give an example of the following types of primary tax authorities that one would use in conducting tax research: (1) legislative/statutory; (2) administrative; and (3) judicial.
3, When taking a home office deduction, how do taxpayers allocate indirect expenses to the home office space? (HINT: there are 2 general methods; please explain both for full credit). I'm only asking about indirect expenses, so please do not discuss direct expenses!
4, What conditions must be met if an employee is to exclude meals and lodging furnished by an employer?
5. If an employee takes a customer to lunch and discusses business, can the employee deduct 50% of the meal for both the customer and him/herself? Explain.
Explanation / Answer
Answer:2 The three types of tax law sources include statutory authority issued by Congress (e.g., the Internal Revenue Code, committee reports), judicial authority (i.e., rulings by the U.S. District Court, U.S. Tax Court, U.S. Court of Federal Claims, U.S. Circuit Court of Appeals, or U.S. Supreme Court), and administrative authority (e.g., regulations, revenue rulings, and revenue procedures). In addition to being issued by different groups, the format and purposes of each of these authorities are different. Whereas statutory authorities are tax laws enacted by Congress, judicial and administrative authorities generally interpret enacted tax laws.
Answer:3 Indirect expenses are expenses incurred in maintaining and using the home. Indirect expenses include insurance, utilities, interest, real property taxes, general repairs, and depreciation on the home as if it were used entirely for business purposes. Only indirect expenses allocated to the home office space, however, are deductible. If the rooms in the home are roughly of equal size, the taxpayer may allocate the indirect expenses to the business portion of the home based on the number of rooms. Alternatively, the taxpayer may allocate indirect expenses based on the amount of the space or square footage of the business-use room relative to the total square footage in the home.
Answer:4 The value of lodging furnished by an employer to an employee will be excluded from the employee’s income if all three of the following qualifications are met:
• The lodging is furnished on the employer’s business premises;
• The lodging is furnished for the convenience of the employer; and
• The employee is required to accept the lodging as a condition of employment.
In general, an employee may exclude from his gross income the value of all meals provided in-kind (not as cash reimbursement) to him, his spouse, or any of his dependents as long as the meals meet the two following conditions:
• The meals are furnished for the convenience of his employer; and
• The meals are furnished on his employer’s business premises.
Answer:5 Yes, the employee can deduct 50% of the meal for both the customer and him/herself. because only 50% of business-related meal and entertainment expenses are allowed as a deduction.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.